Supreme Court of Canada Upholds Order for Google to Block Search Results Globally
By Erin Creber, July 12th, 2017
The Supreme Court of Canada recently issued its decision Google v Equustek (2017 SCC 34) upholding the British Columbia Court of Appeal’s decision to grant an interlocutory injunction requiring Google, a non-party to the underlying action, to block certain search results on its Internet search engine on a worldwide basis. In granting the appeal, the Supreme Court of Canada has held it is within the power of Canadian courts to issue injunctions with extraterritorial effect, so long as it is just and equitable to do so. This is an important decision for intellectual property owners, as it provides a new mechanism to combat infringers.
Background
Equustek is a small technology company based in British Columbia that brought an action against its distributor, Datalink. Datalink had re-labelled one of Equustek’s products and was passing it off as its own. Datalink also acquired confidential information and trade secrets belonging to Equustek and was using this information to design and manufacture a competing product.
The Court issued an interlocutory order prohibiting Datalink from selling its inventory and using any of Equustek’s intellectual property. However, Datalink continued to carry on business from an unknown location, and sell its infringing products via the Internet to customers around the world.
To prevent Datalink from continuing its infringing activities, Equustek approached Google, and requested that Google de-index (i.e. block from search results) all of Datalink’s websites promoting the sale of Datalink’s counterfeit goods.
Google initially refused the request, complying only once a Court order was issued. Pursuant to its internal policies, Google voluntarily blocked individual webpages but not entire websites. Further, Google only blocked Canadian search results.
Datalink easily circumvented the measures taken by Google by simply moving the objectionable content to new webpages within its websites. Throughout this time, Datalink webpages remained available on Google’s non-Canadian search engines, e.g. Google.com.
Consequently, Equustek sought, and was awarded, an order requiring Google to block all Datalink websites globally.
The Decision
In a 7-2 decision, the Supreme Court of Canada upheld the British Columbia Court of Appeal’s ruling that Google must block all Datalink websites on a worldwide basis.
In reaching this decision, the Court considered the RJR MacDonald v Canada three-part test for granting an interlocutory injunction. It was held (i) there was a serious issue to be tried, (ii) irreparable harm would result if the injunction was not granted, and (iii) the balance of convenience did favour granting the injunction.
Justice Abella recognized that the infringing activities in this case were occurring globally, as the Internet has no borders. Google was deemed to be a determinative player in allowing harm to occur to Equustek as a result of Datalink’s activities. Upholding the order against Google was deemed necessary to prevent the irreparable harm that flowed from Datalink carrying on business on the Internet, a business which would be commercially impossible without Google’s facilitation.
Regarding the balance of convenience, the Court rejected Google’s arguments that an injunction cannot be directed at a non-party, an injunction with extraterritorial effect would violate comity, and that the injunction in this case was in effect a permanent injunction. In doing so, the Court indicated that it was within Google’s power to seek an order varying the injunction if there was any risk that compliance with the injunction would violate the laws of another jurisdiction.
Conclusion
This decision confirms that Canadian courts have the ability to issue interlocutory injunctions directed against non-parties, and signifies the Supreme Court of Canada supports the broad implementation of such injunctions, provided it is just and equitable to do so.
For more information please contact:
Erin Creber, Associate, Trademark Agent
T: 613.801.0044
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Contractors and the Legal Ownership of your Intellectual Property
By David Lotimer, July 25th, 2017
Many entrepreneurs and small business owners exhibit an extraordinarily high level of motivation. They are individuals with the wide-ranging skill set that is necessary to achieve success in their chosen field. One of the most important characteristics of these leaders is the ability to recognize their own deficiencies and to identify a capable person to fill that void within their team. If they’re lucky these individuals will sign on to be a part of the team full time as an employee, however many teams are filled with freelance developers, contractors, consultants and the like. Utilizing these less permanent team members can be cost effective and can help to bolster the capabilities of your company. However it can also create legal issues relating to intellectual property ownership.
It important to protect the legal rights associated with intellectual property developed by you and your team, and to ensure that you are not breaching the legal rights of others. It is also important to ensure that your company legally owns the valuable assets you and your team have created. Clear ownership rights comfortably allow you to use, license and sell the inventions, products, and software developed by your team.
Generally when an employee contributes to work done for the employer in the context of their employment, all work product of that employee will automatically be owned by the employer. However ownership rights are slightly murkier when a non-employee is involved in the creation of work product.
What happens for instance when a contractor creates a website for your company based on a template she produced prior to her engagement? What if a software developer uses source code originally created during his engagement with another company in the creation of a new platform for your business? How will ownership rights in a logo created by a graphic designer be distributed? The relationship between employers and non-employees can bring about these types of work product ownership questions.
But don’t fret – there are many ways to structure a relationship with a non-employee in order to protect your business and to guarantee your ability to use the work product created for your company.
Clear intellectual property ownership clauses within a contractor agreement can provide you with confidence in legal ownership of work product. Disclosure and liability obligations related to third party material used within contractor developed work product can be essential to protect your company from legal attacks. Intellectual property licensing can help define invention contributions and allow your company to legally incorporate previously developed intellectual property into your own creations. These are but a few of the strategies you can utilize to clarify ownership rights with non-employees.
The next time you look to fill out your team with a specialized contractor, consider obtaining the advice of an intellectual property expert. We can help you structure the relationship so that you can confidently work with a non-employee, and allow you to get back to focussing on driving the success of your business.
For more information please contact:
T: 613.801.1063
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Are you trying to decide whether to register your Industrial Design in Canada?
By Etienne de Villiers, August 22nd, 2017
A Canadian Industrial Design registration protects original visual features of shape, configuration, pattern or ornament, or any combination of these features, applied to a finished product. Industrial designs are commonly used to protect the outside shape and design of a wide variety of mass produced articles from light fixtures to kitchenwares. Industrial Designs do not protect functional features, they only protect a product’s appearance.
When you register your Industrial Design, you gain exclusive, legally enforceable rights in Canada for five years from the date of registration, and extendable to 10 years with payment of a maintenance fee. You may sell your rights or license others to make, use and sell your design.
In Canada there is a one year grace period to file an Industrial Design application after you make your design public anywhere in the world. It is still recommended to file an Industrial Design application as soon as possible since the design must be original and cannot closely resemble another person’s previously released design.
A Canadian Industrial Design application typically includes multiple views of the “finished article” representing the product in an assembled state. The views can be shown in photographs, but more commonly line drawings are used to ensure the design features are clearly captured. While only one view is required, please note that only features of the design included in the views provided are protected. Typically 6 views are recommended: top, bottom, front, back, left side, and right side. In some cases a perspective view is included, and identical views (e.g. identical left and right side views) may be represented by one of the two identical views.
...Outside Canada...
If you also plan to sell your products outside of Canada, then you might consider filing a Design Patent in the United States or a Community Design in the European Union. The first design application may support a priority claim in foreign countries as long as corresponding applications are filed within six months of the filing date of the first design application. For instance, a Design Patent may be filed in the United States, and within six months an Industrial Design application may be filed in Canada and claim the benefit of the earlier U.S. filing date. Using priority filings can simplify the process of filing multiple design applications in different countries.
So Should You Register An Industrial Design?
Registering an Industrial Design in Canada is an investment to help protect the appearance of your products. Obtaining an Industrial Design in Canada is much less expensive and time consuming than obtaining a patent making this an economical and effective form of industrial protection. While Industrial Designs only protect the look of a product, and not its function, in many cases the outer form of a product is part of its identity and marketability.
If you have any questions about Canadian Industrial Designs or are ready to start an Industrial Design application, please do not hesitate to contact us. We are always happy to help. For more information please contact:
T: 416.995.8655
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Regaining Trademarks That Were Lost in Translation in China
By Scott Miller and Yang Wang, August 3rd, 2017
In China, international companies and celebrities have often found themselves on the losing side in trademark or name right disputes. One reason is that an English word can be translated in Chinese either phonetically or conceptually, and there are usually multiple Chinese characters with the same pronunciation to choose from. Another reason is that the Chinese trademark system is a first-to-file system same as in Canada, but prior-use is not a reasonable ground to displace a registered trademark.
The original English names (e.g. Jordan) may be hijacked by local companies by using variation forms of the phonetics in English (e.g. Qiaodan) or the translation in Chinese characters (e.g. 乔丹). These variations are difficult to distinguish from the original names by local customers since the majority of the Chinese population does not speak or read English, especially seniors and people living in rural areas. For international companies and celebrities, the Chinese courts need to be convinced that their trademarks and names are recognized as "famous", which is a tremendously difficult threshold to establish.
China has started taking intellectual property rights more seriously because Chinese companies, such as Huawei, Lenovo, and Haier, are becoming powerhouses of valuable intellectual property. In recent trademark cases, we have observed a trend that the Chinese courts are now more willing to consider the brand reputation developed by previous use outside of China. Below are a few notable cases:
Michael Jordan v Qiaodan Sports Co. Ltd.
In China, the retired basketball superstar Michael Jordan is known as “乔丹”, the most common Chinese translation of his last name. In 2001, a local sportswear manufacturer Qiaodan Sports registered a number of trademarks including “乔丹” and “QIAODAN”. Michael Jordan sued for infringement of his name rights after finding that Qiaodan Sports brought in $276 million in revenue in 2012. The trial court ruled that “Jordan” is a common English name which is not uniquely associated with Michael Jordan. Furthermore, the use of one version of the English translation does not necessarily constitute infringement. Michael Jordan later on appealed this decision.
In December 2016, China's Supreme People's Court overturned earlier rulings. The court found that a strong link between “乔丹” and Michael Jordan personally was established in China before Qiaodan Sports had maliciously registered “乔丹”. The company was fully aware of Michael Jordan’s reputation in China and enriched by passing off. Therefore, the Supreme People’s Court invalidated the “乔丹” trademark registration. Meanwhile, the court held that the link between “QIAODAN” and Michael Jordan has not been established, as naturally Michael Jordan would not have used “QIAODAN” in any manner.
New Balance v New Boom, New Barlun, and New Bunren
In 2017, the Suzhou Intermediate People’s Court has ordered five shoe manufacturers using the name New Boom and the signature slanting “N” logo to pay $250,000 in fines to the state and an undetermined amount to New Balance. Another Chinese court had awarded New Balance $550,000 against companies making New Bunren brand shoes. We are still waiting for the outcome of an outstanding case against the brand New Barlun.
Most international companies do register their English brands when entering the Chinese market. However, what’s often forgotten, or deemed less important, is the registration of Chinese translations. This overlooking may cause significant economic losses eventually as a registration for the English words will not automatically extend to the Chinese translations.
Recent court decisions serve as encouraging precedents to international brand owners. The Supreme People’s Court is more willing to consider all relevant circumstances, in particular the fairness and commercial value behind the name or trademark. It also worth to mention that the Chinese Trademark Office has granted preliminary approval for nine Donald Trump trademarks it had previously rejected. The key to success is to present sufficient evidence to establish the link between the original names and Chinese translations, and show bad faith on the part of the trademark squatter. Recent cases emphasize the need for international companies and celebrities to identify and register Chinese translations or transliterations of their trademarks and names as soon as possible, in order to ensure that they are protected against trademark squatters.
For more information please contact:
Scott Miller, Partner, Head of the Litigation Department
T: 613.801.1099
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Yang Wang, Ph.D., Summer Law Student
T: 613.801.1082
