How to Avoid Intellectual Property Litigation

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  • 1. CLE Seminar for In-House Counsel January 8, 2014 San Francisco, CA How to Avoid Intellectual Property Litigation Rob McDonald C. Gideon Korrell Partner, Edmonton +1 780 423 7305 rob.mcdonald@dentons.com Associate, Silicon Valley +1 650 798 0360 c.gideon.korrell@dentons.com
  • 2. Canadian Intellectual Property Litigation 1. Trade-marks Act (also common law rights), R.S.C. 1985, c.T-13 2. Patent Act , R.S.C., 1985, c. P-4 3. Copyright Act , Copyright Act, R.S.C. l985, c. C-42, as amended 4. Industrial Design Act, RSC 1985, c I-9 5. Trade Secrets and Confidential Information (not covered by legislation – common law rights),
  • 3. Top Five IP Litigation Issues in Canada 1. Definition of Intellectual Property 2. Ownership of Intellectual Property 3. Loss of Trade-mark Rights 4. Moral Rights and Fair Dealing 5. Non-Competition / Restrictive Covenant Clauses
  • 4. Definition of Intellectual Property 1. Importance of defining rights in agreement 2. Disputes over inclusion/exclusion of certain IP (software, domain names, prototypes, client lists, non-patentable ideas) 3. Don’t rely on standard definitions (not just trade-mark, patent, copyright and industrial design) – many items not covered under these definitions 4. Define confidential information and beware “public domain” clauses
  • 5. Ownership of Intellectual Property 1. Ownership rights set out in legislation 2. General rule is employer owns IP if created in the course of employment 3. General rule independent contractor owns IP, inventor owns patent 4. Agreement to the contrary overrides general rule 5. Argument over “scope of employment” 6. Argument over employee v. independent contractor 7. IP Ownership Agreement at start of relationship avoids this issue
  • 6. Ownership of Intellectual Property (cont’d) 8. Examples of common disputes (website design, software design, graphic design, engineering services, inventions) 9. Implied license in the event of non-ownership (but note requirement of Copyright Act for licenses to be in writing) 10. Joint ownership – in Canada, joint owners do not need consent of other co-owners to sell entire interest, but they do require consent to grant a license
  • 7. Loss of Trade-mark Rights 1. Loss of distinctiveness as a ground of invalidity 2. Improper licensing or acquiescence to improper use can lead to loss of distinctiveness 3. Control over licensees is key 4. Ensure proper filing – date of first use, proper owner, proper description of wares and services, proper basis of application 5. Concurrent use of confusing marks (s.21) 6. Confusion with prior existing trade-mark or trade name leads to lack of entitlement (s.16)
  • 8. Loss of Trade-mark Rights (cont’d) 7. Proper searching can assist in avoiding disputes but common law usage difficult to ascertain 8. Use in Canada is key – registered v. unregistered rights
  • 9. TRADE-MARK CHECKLIST ___ ___ ___ ___ ___ ___ ___ ___ ___ Using the trade-mark Always capitalize at least the first letter of the trade-mark Do not pluralize trade-marks Do not use trade-marks as a verb Do not change the appearance of a design trade-mark Use proper marking (® for registered, TM for unregistered) No generic use of trade-mark No use of the trade-mark by others without license and control (see s.50(2) – presumptions if public notice is given) Monitor in-house and outside use of the trade-mark Do not ignore infringements
  • 10. Moral Rights and Fair Dealing 1. Moral rights may only be owned and asserted by the copyright creator 2. Moral rights may be waived but not assigned – obtain signed waivers! 3. Section 14.1 of Copyright Act sets out moral rights – integrity, authorship 4. Fair dealing – not the same as fair use – research, private study, criticism and review – parody, satire, education (new)
  • 11. S. 14(1) – Defines the right S. 14(2) – cannot be assigned, but can be waived S. 28.2(1) - Infringement The author’s right to the integrity of a work is infringed only if the work is, to the prejudice of the honour or reputation of the author, (a) distorted, mutilated or otherwise modified; or (b) used in association with a product, service, cause or institution.
  • 12. • Always deal with moral rights in a written agreement with the author • Employers cannot waive moral rights on behalf of an employee • Consider carving out reasonable exceptions to a general waiver, ex. attribution rights, portfolio rights
  • 13. Non-Competition/Restrictive Covenant Clauses 1. Canadian Courts will impose reasonable restrictions on these clauses 2. Clauses that are too restrictive/unfair and which interfere with a person’s right to gainful employment will be struck down 3. Use alternative clauses for time, territorial restrictions
  • 14. QUESTIONS?