27 January, 2016

Metatags and IP Rights, Eh - Infringement of Rights Through Metatags in Canada

The Internet has spawned a great deal of new issues when it comes to intellectual property, even outside of the more obvious problems of piracy and sale of counterfeit goods from overseas. One issue that most would not think about in the context of infringement would be metatags. For the uninitiated, metatags are words or phrases placed in the code of a website that indicate the content of the website and aid in the site's search engine listings when certain terms and words are searched. They can be quite powerful in pulling traffic to a particular site, and are hidden from plain view unless the website's underlying code is observed. As such, metatags can incorporate trademarks or other protected works without displaying them, but resulting in that website appearing when those words are searched (or potentially improving their ranking when non-registered words are searched). With this in mind, could one infringe another's rights through metatags, and if so, to what extent? This question was answered recently by the Canadian Court of Appeal.

The case of Red Label Vacations Inc. (Redtag.ca) v 411 Travel Buys Limited dealt with two competing travel service companies; Red Label, established in 2004, and 411 Travel Buys, established four years later in 2008. 411 Travel Buys, upon their establishment, embarked on the creation of a website for the business, hiring a student as an intern to do so, directing her to look at other more established site for inspiration and guidance on what worked (including Red Label's website Redtag.ca). As a result some metatags were copied over from Red Label's website onto the 411 Travel Buys' site, incorporating some of Red Label's registered trademarks (including the phrases "redtag.ca vacations" and "Shop. Compare. Pay less!! Guaranteed"). The phrases were not visible on the page, but were incorporated in the site's metatags in their entirety, among many other words and phrases. Upon discovering this in 2009, Red Label took 411 Travel Buys to court, asserting copyright infringement in the phrases and the infringement of their registered trademarks.

Metadata can be surprisingly revealing
The Court first dealt with Red Label's claim of trademark infringement under section 20 of the Canadian Trade-marks Act. Justice Webb, handing down the judgment of the Court, initially discussed the 'use' of Red Label's trademarks in their incorporation in the metatags, and whether that would indeed be a use under the section. Affirming the judgment at first instance (which can be found here), he saw that the use of the trademarks in the metatags would not, in this instance, amount to infringement, as they were not used for the purpose of distinguishing or identifying 411 Travel Buys' services on their website in connection with Red Label's services. He did, however, accept that there can be the possiblity of such, but rejected it in the case at hand: "...in some situations, inserting a registered trade-mark (or a trade-mark that is confusing with a registered trade-mark) in a metatag may constitute advertising of services that would give rise to a claim for infringement". This needs to be illustrated through further evidence, and specifically in connection with the services provided by both parties (411 Travel Buys did not offer their services online, only via the phone, whereas Red Label did). Justice Webb did not discuss the extent of use or degree of use in any detail, but this writer believes his interpretation might be in the right direction.

The second point (as Justice Webb easily dismissed any claims on passing off, again affirming the first instance judgment) dealt with copyright. The point was brief, agreeing with the Federal Court Judge, who saw that "[w]hile in some cases there may be sufficient originality in metatags to attract copyright protection when viewed as a whole, the substance of the metatags asserted by the Plaintiff in this case does not meet the threshold required to acquire copyright protection in Canada". What the Federal Court Judge deemed was a lack of any degree of skill or judgment used by Red Label, or sufficient originality, to afford the metatags any level of protection through copyright. The Court therefore rejected the appeal as a whole.

Initial interest confusion was discussed in more detail by the judge at first instance, and Justice Dawson, in her concurrent judgment to Justice Webb, briefly touched on this: "The extent to which a trademark may be used in metatags without infringing the trademark is, of necessity, fact specific. These reasons ought not to be read as endorsing the Judge’s remarks relating to “initial interest confusion” or as endorsing every alternate basis on which the Judge dismissed the action".

In the UK metatags have been discussed, although not in many cases, most recently in Interflora Inc v Marks and Spencer Plc, where the High Court (after a CJEU referral) deemed the use of a competitor's trademarks as metatags would infringe their rights in those marks. Going contrary to the Canadian Court of Appeal, they endorsed the initial interest confusion theory, potentially adding an additional lawyer of complexity to metatag cases in the UK. The Court of Appeal disagreed, and remitted the case back to the High Court for retrial (currently still pending). This leaves the situation with metatags unclear in the UK, but remains as insight into the application of IP rights in metatags for the time being.

In the United States the question has not been answered definitely, with different Circuit Courts taking different approaches. In Brookfield Communications, Inc v West Coast Entertainment Corporation metatags were seen as infringing a registered trademark (constituting a use of the mark), even though the tags are not communicated to the public as a part of the website. On the other hand, in S&L Vitamins, Inc v Australian Gold, Inc, it was deemed this was the case, and that the incorporation of metatags would not constitute a use of a mark and therefore infringe it.

As can be seen, the status of metatags and trademarks is quite uncertain, although the Canadian perspective seems a lot more clear. In any event, the use of such tags is a big part of the operation of the Internet and search engines like Google, and thus do carry a great deal of value if used properly. This writer would be for more stricter approaches in protecting certain terms in metatags; however, there should be no monopoly on the use of more 'generic' terms to facilitate a more functional and competitive online marketplace.

Source: JDSupra

21 January, 2016

Another Break - Justice Arnold Settles the Kit Kat Case After CJEU Decision

After quite an unsatisfying Court of Justice decision earlier in September in the Kit Kat case, many of us invested in the world of IP were waiting for the decision by the High Court of Justice in the UK applying the CJEU's considerations. The case has since been decided by Justice Arnold, finally settling (for now?) the debate around the the-dimensional marks.

By way of a short introduction, the case of Société Des Produits Nestlé SA v Cadbury UK Ltd dealt with the arguably iconic Kit Kat chocolate bar. The bars comprise four individual chocolate wafer fingers connected to each other with a solid chocolate base. Nestle applied to register the three-dimensional shape of the bar as a trademark without the Kit Kat logo embossed on the top of each finger, which was subsequently opposed by Cadbury. The case was referred to the CJEU by Justice Arnold (discussed more here), leading to the decision in question.

Justice Arnold post the CJEU decision (approximation)
The biggest issue in the case was the apparent mistranslation of Justice Arnold's question, who, in essence, asked whether an applicant needed to only prove recognition (and subsequent association to the applicant) of the mark by a significant portion the relevant public, or whether they have to rely on the mark to indicate the origin of the goods for a mark to have acquired distinctiveness. One has to note that this has to be in isolation of any other marks present in that product, and that particular feature has to identify the origin of the goods by themselves (i.e. the shape of the bar rather than the embossed logo on the top of it). The questions were, however, partially mistranslated during the proceedings, with the latter question being changed to a matter of perception rather than reliance.

Both the Opinion of Advocate General Wathelet and the judgment by the CJEU failed to address Justice Arnold's question in full, rejecting the first part of the question but leaving the matter of reliance unanswered.

Having considered the possible answer to his question, Justice Arnold summarized what he perceived the accurate consideration to be: "...in order to demonstrate that a sign has acquired distinctive character, the applicant or trade mark proprietor must prove that, at the relevant date, a significant proportion of the relevant class of persons perceives the relevant goods or services as originating from a particular undertaking because of the sign in question (as opposed to any other trade mark which may also be present)". (emphasis the court's)

Additionally, he concluded that "...when assessing whether the applicant has proved that a significant proportion of the relevant class of persons perceives the relevant goods or services as originating from a particular undertaking because of the sign in question, to consider whether such persons would rely upon the sign as denoting the origin of the goods if it were used on its own".

The focus on provenance is therefore on both perception of a particular mark as the indicator of the origin of certain goods or service, and whether the same public subsequently relied on that mark to indicate that very origin, irrespective of any other marks that might be present on those goods.

Justice Arnold then answered the question, agreeing the initial decision of the Hearing Officer. In his mind, although he referred to reliance on the mark, his rationale was in line with the CJEU decision. He correlated reliance with perception, which would fulfill the requirement set by the CJEU. Although survey evidence showed identification of the Kit Kat bar, it merely displayed recognition and not that they perceived it as the exclusive designation of the origin of the goods in question. Therefore he dismissed Nestle's appeal due to a lack of concrete evidence establishing acquired distinctiveness.

The Kit Kat saga has been a curious one, and does highlight some issues that surround CJEU referrals and linguistic nuances. Even so, this writer thinks Justice Arnold applied the law as well as he could in the light of the answer given by the CJEU. This does, however, raise questions on evidence, especially with the survey evidence shown by Nestle and the uncertainty as to what would be sufficient to establish 'perception' and subsequent reliance.

19 January, 2016

Fair and Square - DMCA Takedown Notification Senders Must Consider Fair Use

The DMCA takedown notice has become near universal on the Internet, allowing for those whose rights have been infringed online to have the service provider take down that material or face the music for their ignorance. What this has given rights holders is, arguably, a weapon, which allows them to take down material on a whim with very little or no regard to its actual use or purpose. Often one can accidentally include infringing material, or even use them for a legitimate purpose, yet rights holders have never had to consider these facts, but could assert their rights when ever they wanted to. This changed towards the end of 2015, when the US Court of Appeals addressed the question on what amounts to 'authorization under 17 USC § 512. This writer wanted to discuss this case sooner, and laments his lateness.

The case of Lenz v Universal Music Corporation dealt with Stephanie Lenz, who uploaded a video on YouTube of her young kids dancing to the song Let's Go Crazy by Prince, lasting a lengthy 29 seconds. The video comprises of her two kids, specifically her youngest, bopping to the song, which is audible in the background. Upon finding Ms. Lenz's video, Universal Music lodged a removal request with YouTube, who promptly removed the video. Ms. Lenz sent a counter-notification to YouTube, which was defended by Universal as a legitimate request (and in their correspondence, did not discuss or mention fair use, but asserted plain infringement). Ms. Lenz subsequently sought counsel, and the video was reinstated some time after a second counter-notification was sent, and she pursued further action in the matter, asserting a misrepresentation claim under section 512(f).

The heart of the case lies in section 512, and more specifically, the obligations in places on both the notified and the notified party. Under subsection c, the service provider has to 'expeditiously' remove any infringing material brought to its attention so as to benefit from the safe harbor provisions in the same section, and they have to notify the party who placed the infringing material on their service (the same affords them an appeal process to these notifications as well). Finally, should a rights holder abuse this process, subsection f provides that the person whose material has been removed due to this abuse can subsequently claim for damages due to the misrepresentation made by the notifying party.

A big point of contention in the case was whether a rights holder has to consider fair use under 17 USC § 107 before using the notification process. Although the section does not mandate this, it does, however, stipulate that "...the complaining party has a good faith belief that the use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law". This would potentially encompass fair use, as that would amount to an authorization for the work's use under law, even if the party who controls those rights objects to the use in some way.

Fair use, who would've thought!?
The Court discussed, although fairly briefly, whether fair use would be an affirmative defense that merely excuses infringement (i.e. does not authorize the use, but merely dismisses a later assertion of infringement should one be put forth), or whether it would be a true authorization and not an affirmative defense. The Court dismissed Universal's argument, and asserted that "...for the purposes of the DMCA — fair use is uniquely situated in copyright law so as to be treated differently than traditional affirmative defenses. We conclude that because 17 U.S.C. § 107 created a type of non-infringing use, fair use is "authorized by the law" and a copyright holder must consider the existence of fair use before sending a takedown notification under § 512(c)". This means that when a rights holder intends to send a notice under the section, they have to make a bona fide assessment on the legitimacy of the use of the work under fair use. Failure to do so would be a misrepresentation under section 512(f).

What followed was the Court's determination on whether Universal should have known that the video was fair use. This is an objective assessment, seeking actual knowledge of fair use on part of the notifier, rather than a simple mistake (using the notifier's subjective good faith knowledge at that time, rather than a standard of reasonable belief or knowledge, for example). The Court saw that Universal had not been 'willfully blind' to the existence of fair use or its application to Ms. Lenz's video. Ultimately, no misrepresentation was found, and Ms. Lenz could not recover damages. One has to still note the closing remarks by Judge Tallman, who handed down the majority's judgment: "Copyright holders cannot shirk their duty to consider — in good faith and prior to sending a takedown notification — whether allegedly infringing material constitutes fair use, a use which the DMCA plainly contemplates as authorized by the law".

This writer was truly surprised this point had never been argued at court, but found Judge Tallman's judgment to be correct. Arguably, fair use (and fair dealing here in the UK) is not merely an affirmative defense, but presents an authorization for the use of copyright protected works for those intended purposes, or within the remit of a given similar provision. Leaving it as merely a shield would encumber those using the works with a heavy responsibility for defending their use at court; one that most of them would not necessarily be able to afford. A stricter authorization allows for this use, and puts the burden on those who wish to assert their rights, and rightfully so, since they benefit the most from their works.

Source: JDSupra

14 January, 2016

A Different Slant on Things - Disparaging Trademarks Infringe US First Amendment

As a global society we have come a long way when it comes to racial equality and acceptance. Whether there is true equality and no lingering issues is a strong point of contention, and arguably something that will never be wholly equal, but we have come a long way when it comes to the terminology employed when discussing those of different ethnic background. Even so, there still are huge tensions when it comes to the use of racially derogatory terms, and in the light of the recent Washington Redskins litigation (discussed more here) it has become more poignant than ever in conjunction with trademarks. In similar proceedings, in In Re Tam (discussed more here), the Court of Appeals saw that the use of derogatory terminology would not infringe free speech under the First Amendment to the US Constitution, and would, therefore, not be registrable. The Court then issued a rehearing of the case sua sponte (without any applications from either party to do so), for which a decision was handed down just before Christmas 2015.

As the case's facts have been presented in the article published on this very blog earlier, they will be discussed only briefly. The case of In Re Simon Shiao Tam dealt with Mr. Tam and his band The Slants. The name, a term described as offensive to Asians, was used by the band in an effort to reclaim the negative term and to use it to inspire those of Asian heritage to embrace who they are, even in the face of negativity. Mr. Tam filed an application to register the name as a trademark in the US; however, his application was rejected as being 'disparaging' towards Asians under 15 USC § 1052. He appealed the subsequent decisions, arguing that the rejection impeded his rights under the First Amendment (an argument that was also rejected in earlier proceedings), finally ending up in the sua sponte proceedings in question.

Does section 2(a) restrict freedom of speech?

The Court, in the judgment of Judge Moore, goes onto great lengths discussing the impact that the section has, or could have, on the expression embodied in a given (applied for or registered) trademark. The Court asserts that the section "... does more than discriminate on the basis of
topic... [but] also discriminates on the basis of message conveyed". As the government, through the USPTO, rejects marks on a prima facie assessment of the message contained or conveyed through them, it will in some instances prevent the expression using those marks by rejecting them. It should, arguably allow all expression or none of it, should it be disparaging or potentially disparaging. Although they defend that the rejections only reject certain words and not viewpoints, one could argue, and the Court agreed, that this is indeed a rejection of a particular viewpoint, rather than a mere word or words (i.e. a negative viewpoint).

The Court further highlighted the often dual-expression contained in a trademark, and the regulation of its 'commercial speech', rather than its concrete expression, would not deflect its standards under the First Amendment. By rejecting a mark the government is rejecting the expression contained in that mark, no matter if its used for a commercial purpose (as commercial speech) or not. The Court concluded that the government did indeed restrict speech through section 2(a).

Trademarks can be used even if not registered, or are government speech

The government defended the section through asserting that it does not prevent the party from using the mark (i.e. they can still call themselves The Slants, just will not be able to register the name). The Court's focus on this was in relation to the benefits lost by the parties who faced rejection, even though they could use the name, deeming it an imposition of their freedom of speech. Arguably, the loss of a trademark through registration might push the parties to changes names to ones where they can enjoy the benefit of registration, which would prevent free speech indirectly. The value in registration if significant, and preventing the parties from enjoying this would create a disincentive to register potentially disparaging marks.

Little Timmy didn't realize just how insensitive
he was with his expression
In Judge Moore's mind this would be a significant chilling effect on free speech in the marketplace, and contrary to the First Amendment. Mr. Tam would, even in the absence of a registration, be able to defend the band's name under common law (although, Judge Moore pointed out, this would be highly unlikely), the rejection would still deny him the significant benefits that registration would afford him.

The government also asserted that a trademark registration is government speech, and therefore not covered by the First Amendment. This does not, however, include the registrant's use of the mark, but merely the act of registration or rejection of that mark. One can appreciate that the registration of a mark does not convey any endorsement or approval of a product or service adorning the mark registered, and thus, arguably at least, would not amount to any form of government speech, nor would the inclusion of the ® symbol do the same (contrary to the government's argument to the latter). Clearly, the conversion of any speech into government speech by the mere registration or affixing of the ® symbol would allow for the government to regulate that speech without infringing the First Amendment. The Court therefore swiftly rejected this argument, acknowledging the slippery slope this would create with all government registrations and their suppression on a whim. As Judge Moore summarized: "When the government registers a trademark, it regulates private speech. It does not speak for itself".

Is the registration of a trademark a subsidy?

The Court also discussed whether the registration of a mark would amount to a subsidy, but in the end strongly rejected this notion, as the denial of a benefit to a citizen under the rationale of restricting their speech (by disincentivizing their expression through the loss of these benefits). Also, as the Lanham Act derives itself from the Commerce Clause and not the Spending Clause (which allows the government to set conditions to the benefits that derive from it), it is further evidence that the registration of a trademark is not a subsidy. The Court concluded that the section is not a subsidy, and does not therefore avoid strict scrutiny.


The Court rejected the government's arguments and deemed section 2(a) to be unconstitutional. The case did provoke a great deal of discussion among the judges, with several concurring and/or dissenting judgments being handed down, demonstrating just how unsure the judiciary is on the section. Yet, this writer is sure that all of the judges can agree on one position, expressed by Judge Moore: "Even when speech “inflict[s] great pain,” our Constitution protects it “to ensure that we do not stifle public debate“".

The case does have a significant effect on the up-coming Redskins case, which is set for its appeals hearing later this year. Whether they adopt the position set by the Court in this case remains to be seen, but this writer would imagine the assertion that section 2(a) is unconstitutional to stick, unless the Fourth Circuit conjures up a novel way of avoiding the extensive considerations above. Nevertheless, it would set the stage for a Supreme Court decision on the case; one which many would undoubtedly welcome.

Source: Washington Post

08 January, 2016

No More Monkey Business - US Federal Court Decides on Monkey Selfie Case

One of the more peculiar cases from 2014 was one involving a selfie taken by a monkey (now having been identified as Naruto), and whether that particular animal could hold the rights to the very photograph it took of itself without any intervention or instruction from the owner of the camera, David Slater (more on the case on this blog can be found here). While the question seemed to have an unequivocal answer, at least to this writer, the fight is all but over, and the District Court of Northern California had to decide the case at first instance.

Following the discussion in 2014 PETA filed a complaint asserting that Naruto, inter alia, was the author of the copyright work (the picture in question) and that animals would not, under the US Copyright Act, be excluded as authors. In their argument, as section 201 affords the ownership for copyright in an author or authors (sans any further definition or express exclusion of anything but human authors), "...to be an “owner” and, by extension, to have standing, the plaintiff need only allege to be the “author” of a disputed work". This is backed up by their argument that there is nothing unreasonable about granting standing to animals, referring to the lack of definition of a human requirement, and the possibility of affording copyright to corporations (i.e. non-human entities).

Bobo finally had an avenue of protection for
his vast collection of pictures of bananas
This case has now been resolved, with a clear rejection by Judge Orrick who presided over the case. The full text of his judgment has not been released, however, he did state during the hearing for the opinion that "...[he is] not the person to weigh into this... [and] [t]his is an issue for Congress and the president. If they think animals should have the right of copyright they're free, I think, under the Constitution, to do that".

The minutes for the hearing further clarify this: "The Court announces the tentative opinion, in line with the Ninth Circuit’s opinion in Cetacean Community v Bush, that while Congress and the President can extend the protection of law to animals as well as humans, there is no indication that they did so in the Copyright Act. The Copyright Office’s Compendium is consistent with the Court’s understanding". (links added)

Arguably, the case for animals' rights in copyright protected works seems far fetched at best, and this writer would wholeheartedly agree with Judge Orrick in this instance. While there is, potentially, a moral argument for the affording of rights to non-human animals, what this would do is open the floodgates for outlandish assertions of rights for animals and extend the remit of copyright beyond its (arguable) remit. Even if no express language is used to exclude other species from holding rights, it is difficult to give rights to those that do not understand them nor gain from the royalties themselves (as PETA would, undoubtedly, use the funds gained from those royalties on behalf of Naruto). In the end common sense should prevail, and only an express inclusion of animals' rights in copyright would create this possibility.

The case has truly been a novel one, and might still not be over if PETA decide to appeal the decision. This writer is incredibly skeptical as to the possibilities of their success, but would welcome any interesting discussion on the topic in or outside the courts.

Source: The Guardian