Sookman tclg 2013 to 2014 (1)

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Barry Sookman Toronto Computer Lawyers's Group Year in reviews (2013-2014) presentation

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Sookman tclg 2013 to 2014 (1)

  1. 1. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca McCarthy Tétrault Advance™ Building Capabilities for Growth Barry B. Sookman bsookman@mccarthy.ca 416-601-7949 June 5, 2014 Toronto Computer Lawyers’ Group: The Year in Review: (2013-2014) 13440957
  2. 2. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 2
  3. 3. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Google v AEPD, Case C-131/12, CJEU 13 May 2014 “As regards a situation such as that at issue in the main proceedings, which concerns the display, in the list of results that the internet user obtains by making a search by means of Google Search on the basis of the data subject’s name, of links to pages of the on-line archives of a daily newspaper that contain announcements mentioning the data subject’s name and relating to a real-estate auction connected with attachment proceedings for the recovery of social security debts, it should be held that, having regard to the sensitivity for the data subject’s private life of the information contained in those announcements and to the fact that its initial publication had taken place 16 years earlier, the data subject establishes a right that that information should no longer be linked to his name by means of such a list. Accordingly, since in the case in point there do not appear to be particular reasons substantiating a preponderant interest of the public in having, in the context of such a search, access to that information, a matter which is, however, for the referring court to establish, the data subject may, by virtue of Article 12(b) and subparagraph (a) of the first paragraph of Article 14 of Directive 95/46, require those links to be removed from the list of results.” 3
  4. 4. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Google v AEPD, Case C-131/12, CJEU 13 May 2014 “It follows from all the foregoing considerations that the answer to Question 2(a) and (b) is that Article 2(b) and (d) of Directive 95/46 are to be interpreted as meaning that, first, the activity of a search engine consisting in finding information published or placed on the internet by third parties, indexing it automatically, storing it temporarily and, finally, making it available to internet users according to a particular order of preference must be classified as ‘processing of personal data’ within the meaning of Article 2(b) when that information contains personal data and, second, the operator of the search engine must be regarded as the ‘controller’ in respect of that processing, within the meaning of Article 2(d).” 4
  5. 5. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Google v AEPD, Case C-131/12, CJEU 13 May 2014 Therefore, if it is found, following a request by the data subject pursuant to Article 12(b) of Directive 95/46, that the inclusion in the list of results displayed following a search made on the basis of his name of the links to web pages published lawfully by third parties and containing true information relating to him personally is, at this point in time, incompatible with Article 6(1)(c) to (e) of the directive because that information appears, having regard to all the circumstances of the case, to be inadequate, irrelevant or no longer relevant, or excessive in relation to the purposes of the processing at issue carried out by the operator of the search engine, the information and links concerned in the list of results must be erased.” 5
  6. 6. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Google v AEPD, Case C-131/12, CJEU 13 May 2014 “Following the appraisal of the conditions for the application of Article 12(b) and subparagraph (a) of the first paragraph of Article 14 of Directive 95/46 which is to be carried out when a request such as that at issue in the main proceedings is lodged with it, the supervisory authority or judicial authority may order the operator of the search engine to remove from the list of results displayed following a search made on the basis of a person’s name links to web pages published by third parties containing information relating to that person, without an order to that effect presupposing the previous or simultaneous removal of that name and information — of the publisher’s own accord or following an order of one of those authorities — from the web page on which they were published.” 6
  7. 7. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Google v AEPD, Case C-131/12, CJEU 13 May 2014 ¬ Google Removal Process: ¬ “A recent ruling by the Court of Justice of the European Union found that certain users can ask search engines to remove results for queries that include their name where those results are inadequate, irrelevant or no longer relevant, or excessive in relation to the purposes for which they were processed. ¬ In implementing this decision, we will assess each individual request and attempt to balance the privacy rights of the individual with the public’s right to know and distribute information. When evaluating your request, we will look at whether the results include outdated information about you, as well as whether there’s a public interest in the information—for example, information about financial scams, professional malpractice, criminal convictions, or public conduct of government officials. ¬ If you have a removal request, please fill out the form below. Please note that this form is an initial effort. We look forward to working closely with data protection authorities and others over the coming months as we refine our approach.” 7
  8. 8. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Zhang v. Baidu.com Inc. 2014 WL 1282730 (S.D.N.Y Mar. 28, 2014) ¬ Whether the search engine baidu.com can be forced to display search results concerning the democracy movement in China or has First Amendment protection for its search results. ¬ “The central purpose of a search engine is to retrieve relevant information from the vast universe of data on the Internet and to organize it in a way that would be most helpful to the searcher. In doing so, search engines inevitably make editorial judgments about what information (or kinds of information) to include in the results and how and where to display that information (for example, on the first page of the search results or later).” ¬ “Nor does the fact that search-engine results may be produced algorithmically matter for the analysis. After all, the algorithms themselves were written by human beings, and they "inherently incorporate the search engine company engineers' judgments about what material users are most likely to find responsive to their queries.”” ¬ “…it is debatable whether any search engine is a mere "conduit" given the judgments involved in designing algorithms to choose, rank, and sort search results.” ¬ “Plaintiffs' efforts to hold Baidu accountable in a court of law for its editorial judgments about what political ideas to promote cannot be squared with the First Amendment.” 8
  9. 9. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Alberta (Information and Privacy Commissioner) v. United Food and Commercial Workers, Local 401 2013 SCC 62 ¬ “PIPA imposes restrictions on a union’s ability to communicate and persuade the public of its cause, impairing its ability to use one of its most effective bargaining strategies in the course of a lawful strike. In our view, this infringement of the right to freedom of expression is disproportionate to the government’s objective of providing individuals with control over personal information that they expose by crossing a picketline. ¬ This conclusion does not require that we condone all of the Union’s activities. The breadth of PIPA’s restrictions makes it unnecessary to examine the precise expressive activity at issue in this case. It is enough to note that, like privacy, freedom of expression is not an absolute value and both the nature of the privacy interests implicated and the nature of the expression must be considered in striking an appropriate balance. To the extent that PIPA restricted the Union’s collection, use and disclosure of personal information for legitimate labour relations purposes, the Act violates s. 2(b) of the Charter and cannot be justified under s. 1.” 9
  10. 10. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Oracle America, Inc. v Google Inc. 2014 WL 1855277 (CAFC May 9, 2014) “Because we conclude that the declaring code and the structure, sequence, and organization of the API packages are entitled to copyright protection, we reverse the district court’s copyrightability determination with instructions to reinstate the jury’s infringement finding as to the 37 Java packages. Because the jury deadlocked on fair use, we remand for further consideration of Google’s fair use defense in light of this decision.” 10
  11. 11. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 SAS Institute Inc v World Programming Ltd [2013] EWCA Civ 1482 (21 November 2013) ¬ “The court did not itself define what it meant by "functionality"; and in those circumstances there is no reason to suppose that it meant anything different from the way in which the Advocate-General defined the word. Moreover, at [40] it specifically approved what the Advocate-General had said at [57] of his opinion: ¬ "… to accept that the functionality of a computer program can be protected by copyright would amount to making it possible to monopolises ideas, to the detriment of technological progress and industrial development.“ ¬ It will be recalled that in [39] the court had discussed (a) the functionality of a computer program, (b) the programming language and (c) the format of data files used in a computer program. By contrast in it considered only (b) and (c). One must infer, therefore, that the court considered that the functionality of a computer program could not be protected under the Information Society Directive. So I do not think that this carries SAS Institute's argument further.” 11
  12. 12. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 CASL Order in Council 81000-2-1795 (SI/TR) ¬ “His Excellency the Governor General in Council, on the recommendation of the Minister of Industry, pursuant to section 91 of An Act to promote the efficiency and adaptability of the Canadian economy by regulating certain activities that discourage reliance on electronic means of carrying out commercial activities, and to amend the Canadian Radio-television and Telecommunications Commission Act, the Competition Act, the Personal Information Protection and Electronic Documents Act and the Telecommunications Act ("the Act"), chapter 23 of the Statues of Canada, 2010, fixes ¬ July 1, 2014 as the day on which sections 1 to 7, 9 to 46, 52 to 54, 56 to 67 and 69 to 82 of the Act, subsections 12(2) and 12.2(2) of the Personal Information Protection and Electronic Documents Act, as enacted by section 83 of the Act, subsection 86(2), section 88 and subsection 89(1) of the Act come into force; ¬ January 15, 2015 as the day on which section 8 of the Act comes into force; and ¬ July 1, 2017 as the day on which sections 47 to 51 and 55 of the Act come into force.” 12
  13. 13. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 BILL S-4 – An Act to amend PIPEDA ¬ “6.1 For the purposes of clause 4.3 of Schedule 1, the consent of an individual is only valid if it is reasonable to expect that an individual to whom the organization’s activities are directed would understand the nature, purpose and consequences of the collection, use or disclosure of the personal information to which they are consenting.” ¬ Data breach notification obligations and penalties. 13
  14. 14. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 14
  15. 15. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 State of Indiana v. IBM 2014 WL 561658 (Ind. Ct. App. Feb 13, 2014) ¬ Was the State entitled to terminate a 10 year $1.3 billion MSA for material breach? ¬ MSA § 1.4, entitled Construction and Interpretation, provided that the agreement "shall be" construed in a manner consistent with the Policy Objectives: ¬ (5) In the event of any uncertainties regarding the interpretation of any particular provision or term used in this Agreement, or in the event of any ambiguity, vagueness or inconsistency therein or thereof, such provisions and terms shall be read in a manner consistent with the Policy Objectives. In all events, the provisions and terms of this Agreement shall be interpreted with a view toward achieving those objectives. Notwithstanding the foregoing, in no event shall the Policy Objectives change or expand Vendor's obligations hereunder unless expressly agreed to by the Parties pursuant to a Change. ¬ “The State may terminate this Agreement, in whole or in part, for cause in any of the following circumstances… a breach by Vendor of this Agreement which is material considering this Agreement as a whole occurs which cannot reasonably be cured by Vendor within thirty (30) days after delivery of the Termination Notice”. 15
  16. 16. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 State of Indiana v. IBM 2014 WL 561658 (Ind. Ct. App. Feb 13, 2014) ¬ “In determining whether any breach went to the heart of the contract, we find that the core of the contract is identified in the following "Policy Objectives" in the MSA: ¬ The overarching policy objectives of the Modernization Project and this Agreement are (i) to provide efficient, accurate and timely eligibility determinations for individuals and families who qualify for public assistance, (ii) to improve the availability, quality and reliability of the services being provided to Clients by expanding access to such services, decreasing inconvenience and improving response times, among other improvements, (iii) to assist and support Clients through programs that foster personal responsibility, independence and social and economic self-sufficiency, (iv) to assure compliance with all relevant Laws, (v) to assure the protection and integrity of Personal Information gathered in connection with eligibility determination, and (vi) to foster the development of policies and procedures that underscore the importance of accuracy in eligibility determinations, caseload integrity across all areas of public assistance and work and work- related experience for Clients in the Programs…” 16
  17. 17. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 State of Indiana v. IBM 2014 WL 561658 (Ind. Ct. App. Feb 13, 2014) ¬ “…the essence of the Modernization Project was to provide and expand access to services for welfare recipients in a timely, reliable, and efficient manner within federal guidelines, to discourage fraud, and to increase work- participation rates—all of which were problems that plagued the earlier system. Contrary to the trial court's implication in Conclusion No. 100, whether IBM materially breached the contract does not require balancing the number of benefits the State received versus the number of performance standards that IBM failed. Rather, the issue is whether any breach went to the essence of the contract—to provide and expand access to services for welfare recipients in a timely, reliable, and efficient manner within federal guidelines, to discourage fraud, and to increase work-participation rates… ¬ We find that the heart of this contract was to provide services to the poor in a way that complied with federal law. In this respect IBM's performance, as the trial court explained, "consistently missed the mark." This substandard performance by IBM, $437 million and 36 months later, went to the essence of this contract.” 17
  18. 18. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 State of Indiana v. IBM 2014 WL 561658 (Ind. Ct. App. Feb 13, 2014) ¬ Friedlander J, (in dissent) “I believe the trial court applied the correct standard in determining that IBM did not materially breach the Master Services Agreement (MSA)… ¬ The MSA itself requires evaluating a breach for materiality by considering it vis-à- vis the MSA "as a whole.“… Indeed, it seems to me that performance under a contract of this breadth and complexity, whose goals and desired outcomes include some that are not susceptible to quantitative measurement, can be measured only in this manner, i.e., by considering the nature and extent of the nonconforming performance in the context of the entirety of what is required under the contract. The Majority's approach, on the other hand, permits a finding of material breach, with the attendant harsh results to the breaching party, upon the finding of "any breach [that] went to the essence of the contract", which is to say in the present case any breach that affects the provision and expansion of access to services for welfare recipients in a timely, reliable, and efficient manner. It seems to me that, in view of the scope and breadth of the services IBM was required to perform under the contract, such a vigorous definition of "material breach" doomed from the beginning IBM's effort to avoid committing a material breach.” 18
  19. 19. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 State of Indiana v. IBM 2014 WL 561658 (Ind. Ct. App. Feb 13, 2014) ¬ Was IBM entitled to $40 million in assignment fees or were they a penalty? ¬ “We agree with the trial court and IBM that these assignment fees were the price to which the State agreed to purchase IBM's interest in the subcontracts. The State paid the $40 million assignment fee to IBM in consideration for the State accruing the legal right to assume IBM's subcontracts… ¬ Based on the benefits the State received in assuming IBM's subcontracts and the conduct of the State both during the negotiations of the MSA and after, we agree with the trial court that the assignment fees represent value to the State in the ability to assume these subcontracts. Because there was a measurable benefit conferred upon the State under such circumstances, the State's retention of the benefit would be unjust. IBM is therefore entitled to $40 million in assignment fees notwithstanding a finding of material breach.” 19
  20. 20. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 State of Indiana v. IBM 2014 WL 561658 (Ind. Ct. App. Feb 13, 2014) ¬ Was IBM entitled to payment of $43.4 million in deferred fees? ¬ (1) In the event of a Termination of this Agreement for any reason (other than a Termination by expiration), the State shall pay Vendor, to the extent applicable, the charges set forth in Sections 16.6.6(2) and 16.6.6(3)(F) below. In the event of a Termination of this Agreement for any reason (other than on expiration or upon a Termination as set forth in Sections 16.3.1 [Termination for Cause]… in any of which events, Vendor shall not be entitled to Early Termination Close Out Payments), the State shall pay the Early Termination Close Out Payments set forth in Section 16.6.6(3), 16.6.6(4) and 16.6.6(5) and subject to Section 16.6.6(6) if applicable. ¬ MSA § 16.6.6(3) then provided: “Vendor's and its Subcontractors' Early Termination Close Out Payments (as applicable and without duplication) shall be as follows: (F) Vendors and its Subcontractors' unamortized balance of the Deferred Fees, as set forth in Schedule 24 [Deferred Fees].” 20
  21. 21. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 State of Indiana v. IBM 2014 WL 561658 (Ind. Ct. App. Feb 13, 2014) ¬ “We agree with the trial court's interpretation of Section 16.6.6(1) that Deferred Fees are not payable to IBM in the event that the MSA was terminated for cause. The contract is ambiguous because the first sentence of Section 16.6.6(1) required the State to pay IBM the fees in Section 16.6.6(3)(F), which are Deferred Fees. Id. at 702. However, in the second sentence, the contract stated that if the State terminated for cause..., it would not be required to pay any of the payments in Section 16.6.6(3), which included Deferred Fees. ¬ We read the first sentence's qualifying phrase "to the extent applicable" to refer to termination situations in which IBM was not entitled to Deferred Fees. The second sentence clarified situations when the specified Deferred Fees were applicable— namely, that such fees were payable unless there was a termination for cause, an insolvency event, wrongful conduct, or a termination by mutual agreement. In other words, the first sentence of this section applied to situations not listed in the second sentence, such as termination for convenience…Because we have concluded that there was a material breach, the State terminated for cause, and the contract does not require payment of Deferred Fees upon termination for cause, IBM is not entitled to Deferred Fees.” 21
  22. 22. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Fujitsu Services Ltd v IBM United Kingdom Ltd [2014] EWHC 752 (TCC) (21 March 2014) ¬ "Neither Party shall be liable to the other under this Sub-Contract for loss of profits, revenue, business, goodwill, indirect or consequential loss or damage…." ("the basic exclusion"). ¬ The workshare arrangements under the Sub-Contract may have been a very important part of the agreement and the Sub-Contract may have been a significant one in terms of prospect and length. But there may have been very good commercial reasons for deciding to exclude liability on both sides from a loss of profits claim for breach of the workshare arrangements as well as for breach of the other significant arrangements in the Sub-Contract… ¬ Commercial parties are entitled to and do rely on commercial "mores"; they can choose to rely on trust and to prefer not to expose themselves or each other to litigation in due course - for sound commercial and professional reasons. ¬ Here, each party chose consciously to release the other from potentially very significant liabilities in the event of a breach of contract (or any other breach), subject to certain agreed exceptions. ¬ “I conclude that… any liability on the part of IBM for damages (or equitable compensation) on the workshare, change control and money value claims is excluded by virtue of clause 20.7. Those claims are claims for loss of profits and/or loss of revenue and/or loss of business within the meaning of clause 20.7 and do not fall within any of the specific exceptions provided for”… 22
  23. 23. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Fujitsu Services Ltd v IBM United Kingdom Ltd [2014] EWHC 752 (TCC) (21 March 2014) ¬ "20.4 Subject to Clauses 20.6 and 20.8, PwC's liability to Fujitsu arising under any indemnity or otherwise under or in relation to this Sub-Contract, whether in contract, tort, by statute or otherwise and whether or not arising from any negligence on the part of PwC or any of their agents or employees shall be subject to the following limits:… ¬ c) subject to Clauses 20 4(d) and 20.8, in respect of any Claims or losses arising PwC's aggregate liability to Fujitsu arising under this Sub- Contract in each Contract Year shall be limited to £5 million for all events or failures giving rise to such Claims or losses; ¬ d) notwithstanding the cap set out in Clause 20.4(c), PwC's overall aggregate liability for all Claims or losses arising under this Sub-Contract shall be limited, subject to Clause 20.8, to £10 million for all events or failures giving rise to such Claims or losses." 23
  24. 24. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Fujitsu Services Ltd v IBM United Kingdom Ltd [2014] EWHC 752 (TCC) (21 March 2014) “I conclude that : ¬ a) any liability on the part of IBM for damages (or equitable compensation) on the workshop, control change and money value claims would be subject to the limitations of liability set out in clause 20.4 (c) and (d); ¬ b) any liability on the part of IBM on the account claims is subject to the limitations of liability set out in clause 20.4(c) and (d). ¬ This construction is what a reasonable person, being someone with all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time in 2002 (and for the avoidance of doubt in 2008) would have understood the parties to have meant.” 24
  25. 25. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 AB v CD [2014] EWCA Civ 229 (06 March 2014) ¬ In granting injunctions should the presence of a limitation of liability clause be disregarded assuming that those damages would be an adequate remedy as they had been agreed to by the parties? ¬ Lord Justice Underhill “The primary obligation of a party is to perform the contract. The requirement to pay damages in the event of a breach is a secondary obligation, and an agreement to restrict the recoverability of damages in the event of a breach cannot be treated as an agreement to excuse performance of that primary obligation. I share…the position…that, even where a provision limited the victim of a breach to damages which bore no relation to its loss, those damages had nevertheless to be regarded an adequate remedy: …The rule – if "rule" is the right word – that an injunction should not be granted where damages would be an adequate remedy should be applied in a way which reflects the substantial justice of the situation… ¬ the fact that the restriction in question was agreed may, depending on the circumstances of the case, be a relevant consideration – as may the scale of any shortfall and the degree of risk of it occurring.” 25
  26. 26. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 AB v CD [2014] EWCA Civ 229 (06 March 2014) ¬ Lord Justice Ryder: “Injunctive relief is a remedy available to the court to give effect to commercial expectations where it is in the interests of justice that agreed obligations should continue to be binding on the parties, whether that be for an interim period or the term of the contract. The construction of the contract clause in the context of the description of legal principle set out by my Lord has the effect of tending to support rather than undermine parties who have entered or seek to enter into a contract which contains their commercial expectations... For that reason, I favour re-casting the question to be asked on an application for injunctive relief, which is: "Is it just in all the circumstances that a [claimant] be confined to his remedy in damages?" ¬ Lord Justice Laws: “Where a party to a contract stipulates that if he breaches his obligations his liability will be limited or the damages he must pay will be capped, that is a circumstance which in justice tends to favour the grant of an injunction to prohibit the breach in the first place.” 26
  27. 27. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Peracomo Inc. v. TELUS Communications Co., 2014 SCC 29 ¬ Meaning of “wilful misconduct” in an exclusion of liability. ¬ “In short, wilful misconduct includes not only intentional wrongdoing but also other misconduct committed with reckless indifference in the face of a duty to know.” ¬ “While the threshold to break liability under the Convention requires intention or recklessness with knowledge that the loss will probably occur, wilful misconduct under the Marine Insurance Act does not require either intention to cause the loss or subjective knowledge that the loss will probably occur. It requires, in the context of this case, simply misconduct with reckless indifference to the known risk despite a duty to know. The trial judge’s reasons, read in light of the record, show that at the time he cut the cable Mr. Vallée, who had a duty to know better, subjectively adverted to the risk that the cable might be live and decided to cut it anyway on the sole basis of some handwriting that he had seen for a few seconds on a map on a museum wall — a map which was not a marine chart and was of unknown origin or authenticity. Cutting the cable in those circumstances constitutes wilful misconduct as that term is defined in all of the authorities to which I have referred.” 27
  28. 28. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Peracomo Inc. v. TELUS Communications Co., 2014 SCC 29 ¬ Personal liability of officers and directors. ¬ “The trial judge, upheld by the Federal Court of Appeal, found that Mr. Vallée was personally liable for breaching his duty of care to the Telus respondents: para. 49. He held that Peracomo was also liable for the losses both vicariously and personally. Mr. Vallée was the directing mind and alter ego of Peracomo: para. 50. The court of appeal cited ADGA Systems International Ltd. v. Valcom Ltd. 1999 CanLII 1527 (ON CA), (1999), 43 O.R. (3d) 101 (C.A.), leave to appeal refused, [2000] 1 S.C.R. xv, for the proposition that corporate officers and directors may be held liable in their personal capacity where they negligently cause property damage in the course of their corporate duties: para. 43. ¬ I agree with these conclusions. As the Telus respondents point out, corporate personality is not a relevant consideration in this case since Mr. Vallée was personally negligent in cutting the cable. The company is liable as a result of his acts, not the other way around. I would dismiss this ground of appeal.” 28
  29. 29. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 XY, LLC v. Zhu, 2013 BCCA 352 ¬ Are licensee employees liable to the licensor for their tortious acts? ¬ “it appears to be the law in Canada that as long as tortious conduct on the part of an employee or agent of a corporation (or any other employer) is properly pleaded and proven as an “independent” tort by the employee or agent, the wrongdoer can be held personally liable notwithstanding that he or she may have been acting in the best interests of (and at the behest of) the employer or principal. I see no reason in principle or policy why such liability should be restricted to cases involving physical damage (as Said v. Butt may have suggested in 1920), or to claims in negligence (as referred to in London Drugs, Hildebrand and Neilson.) Certainly the Ontario Court of Appeal did not so restrict it in ADGA…” ¬ In any event it is clear that fraud or fraudulent conduct has historically fallen into an established category in which personal liability has been imposed on agents and employees. It is sufficient in the case at bar to rely on this exception, although the acts of the Personal Defendants were properly pleaded as amounting to civil conspiracy and in this sense constituted a tort that was independent of that alleged against JingJing.” 29
  30. 30. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Innovate Technology Solutions, L.P. v Youngsoft, Inc. 418 SW 3d 148 (Ct.App.Tex.2013) ¬ Enforceability of following disclaimer: ¬ Notwithstanding anything contained elsewhere in this Agreement and under any circumstance, for any reason whatsoever, YS shall not be liable for any incidental, ancillary, direct, indirect, special or consequential damages, including but not limited to lost profits, whether in tort or contract, and based on any theory of liability. ¬ “…interpreting the Agreement to mean (in Youngsoft's words) that "Innovate is not entitled to recover any damages from Youngsoft under any circumstances, notwithstanding anything to the contrary..." renders the Agreement illusory, void, and unenforceable”…If Youngsoft is completely insulated from any damage claims from Innovate, it effectively retains the option of discontinuing performance at any time.” 30
  31. 31. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 IN RE IPHONE 4S CONSUMER LITIGATION, 2013 WL 3829653 (N.D.Cal. Jul. 23, 2013) ¬ Is Apple liable for implied warranty of merchantability for Siri features in Iphone? ¬ “Apple argues that this claim is barred because it disclaimed the implied warranty of merchantability in the iPhone 4S's one-year hardware warranty and in the iPhone software license agreement…. ¬ Apple argues that a disclaimer was provided to customers within the packaging of the iPhone 4S and that Plaintiffs could have returned their iPhones within its thirty day return period after they had discovered and reviewed the warranty, if they did not want to consent to its limitations. There is some authority within this district that supports that the disclaimer need not be provided prior to purchase, if the purchasers “were able to review the warranty upon purchase and to return the product if they were dissatisfied with the warranty's limitations.” 31
  32. 32. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 IN RE IPHONE 4S CONSUMER LITIGATION, 2013 WL 3829653 (N.D.Cal. Jul. 23, 2013) ¬ “Unlike express warranties, which are basically contractual in nature, the implied warranty of merchantability arises by operation of law.... [I]t provides for a minimum level of quality.” A plaintiff must demonstrate that the product “did not possess even the most basic degree of fitness for ordinary use.” This means that Plaintiffs must show “more than that the alleged defect was ‘inconvenient’ ” but rather that the products were unfit for their ordinary purpose. Given the acknowledgment that Siri could be used as an assistant for at least basic purposes, Plaintiffs have not alleged sufficiently that the function was unusable or that it did not have the most basic degree of fitness. ¬ See also, IN RE IPHONE 4S CONSUMER LITIGATION, (N.D.Cal. Feb 14, 2014) (express warranty claims dismissed) 32
  33. 33. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 IN RE SONY GAMING NETWORKS AND CUSTOMER DATA SECURITY BREACH LITIGATION, 2014 WL 223677 (S.D.Cal. 2014) ¬ Enforceability of express and implied warranty claims that Sony would provide adequate network security to protect personal information. ¬ “…the PSN User Agreement states: "Except as otherwise required by applicable law, this Agreement shall be construed and interpreted in accordance with the laws of the State of California applying to contracts fully executed and performed within the State of California." Similarly, the SOE User Agreement states: "This Agreement is governed in all respects by the substantive laws of the State of California and of the United States of America." Therefore, based on the unambiguous language set forth above, the Court finds each of Plaintiffs' breach of warranty claims is potentially subject to dismissal under the choice-of-law clauses, subject only to the enforceability of the provisions under applicable law… ¬ Therefore, based on the above, the Court finds the choice-of-law clauses in the PSN and SOE User Agreements enforceable and each of the warranty claims not alleged under California law should be dismissed.” 33
  34. 34. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 IN RE SONY GAMING NETWORKS AND CUSTOMER DATA SECURITY BREACH LITIGATION, 2014 WL 223677 (S.D.Cal. 2014) “Therefore, based on the disclaimer and admonitory language in the PSN User Agreement and the PSN Privacy Policy, the Court finds the language clear and conspicuous. Read in conjunction, both documents explicitly disclaimed any and all claims arising under the implied warranty of merchantability, disclaimed any and all claims arising under the implied warranty of fitness for a particular purpose, stated in all caps that Sony Online Services would be provided "AS IS" and "AS AVAILABLE," and informed consumers that Sony was not warranting the security of consumer personal information transmitted to Sony via the network.” 34
  35. 35. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Convolve, Inc v Compaq Computer Corp, 527 Fed.Appx. 910 (CAFC. 2013), cert. denied 134 S.Ct. 801 ¬ Could plaintiffs pursue a trade secret misappropriation claim where disclosure process in NDA not followed. ¬ “The plain language of the Convolve-Seagate NDA unambiguously requires that, for any oral or visual disclosures, Convolve was required to confirm in writing, within twenty (20) days of the disclosure, that the information was confidential. Paragraph 7 of the Convolve-Seagate NDA provides that, for "any oral or visual disclosures," the disclosing party must (1) designate the information as confidential at the time of disclosure and (2) confirm "in a writing delivered within twenty (20) days to the Recipient which provides clear notice of the claim of confidentiality and describes the specific information disclosed." The intent of the parties, based on this language, is clear: for an oral or visual disclosure of information to be protected under the NDA, the disclosing party must provide a follow-up memorandum. And, we see no error in the district court's conclusion that Convolve failed to provide this written follow-up memorandum with respect to each of these ASTIs.” 35
  36. 36. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Convolve, Inc v Compaq Computer Corp, 527 Fed.Appx. 910 (CAFC. 2013), cert. denied 134 S.Ct. 801 ¬ “If the parties have contracted the limits of their confidential relationship regarding a particular subject matter, one party should not be able to circumvent its contractual obligations or impose new ones over the other via some implied duty of confidentiality. ¬ Indeed, the CUTSA itself compels such a result. The CUTSA states that misappropriation occurs when a trade secret is acquired under circumstances giving rise to a duty to maintain its secrecy. Cal. Civ. Code § 3426.1(b). Convolve disclosed its alleged trade secrets to Seagate pursuant to the provisions of the NDA. Therefore, the "circumstances" giving rise to a duty to maintain the secrecy of the disclosed information is dictated by the terms of the NDA. Convolve did not follow the procedures set forth in the NDA to protect the shared information, so no duty ever arose to maintain secrecy of that information. As such, Convolve's argument must fail.” ¬ See also, BE, IN, Inc v Google Inc 2013 U.S.Dist. LEXIS 147047 (N.D.Cal. Oct. 13, 2013) (Common law trade secret claim against Google denied where there was an NDA.) 36
  37. 37. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Aderhold v. Car2go NA, LLC, 2014 WL 794802 (W.D. Wash. 2014) ¬ Alleged violation of the Telephone Consumer Protection Act (TCPA) which prohibits sending SMS messages made with the prior express consent of the called party using any automated telephone dialing system. The message asked the consumer to enter an activation code to complete the registration process. ¬ “Mr. Aderhold urges…that "[e]xpress consent is `consent that is clearly and unmistakably stated.'" (quoting Black's Law Dictionary 323 (8th ed. 2004)). He argues that because the consumer in Satterfield had to take the affirmative step of checking a box to request promotional material, a similar affirmative step is required in every case. As he puts it, express consent must not only be clear and unmistakable, it must be affirmatively "stated.” 37
  38. 38. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Aderhold v. Car2go NA, LLC, 2014 WL 794802 (W.D. Wash. 2014) ¬ “Some district courts take a broad view of "prior express consent," suggesting that anyone who provides a cellular phone number to a business consents to the business's use of the number to contact him or her… ¬ Several courts have found that sending a text message to an entity for the purpose of opting out of receiving future text messages is nonetheless consent to receive a final text message confirming the optout request… ¬ The court in Emanuel v. Los Angeles Lakers, Inc. found that when a consumer sends a text message requesting a service, she consents to receipt of a text message confirming receipt of the request… 38
  39. 39. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Aderhold v. Car2go NA, LLC, 2014 WL 794802 (W.D. Wash. 2014) “Even if car2go had made no disclosures at all about the purposes for which it would use Mr. Aderhold's cellular number, it defies logic to contend that he did not consent to be contacted regarding his membership application. When people provide their telephone numbers in commercial transactions, it would be odd to imagine that they do not consent to being contacted for purposes of completing that transaction. Could a person who provided a telephone number to a delivery service seriously contend that she had not consented to be telephoned by the service to inform her that her package was en route? Could a person who provided a telephone number to a mechanic claim that she did not consent to be called (or texted) when her car was repaired? According to Mr. Aderhold, if the delivery service and mechanic used an autodialer to make those calls, then they broke the law. The court is confident that Congress did not intend that result when it passed the TCPA. And although Mr. Aderhold is apparently an exception, the court doubts that most customers would feel that their privacy had been invaded by such calls. All of these considerations strengthen the court's conclusion that Mr. Aderhold consented to the text message he received.” 39
  40. 40. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Apple Inc. v Motorola, Inc. 2014 WL 1646435 (CAFC, 2014) Per Reyna J., “To the extent that the district court applied a per se rule that injunctions are unavailable for SEPs, it erred. While Motorola's FRAND commitments are certainly criteria relevant to its entitlement to an injunction, we see no reason to create, as some amici urge, a separate rule or analytical framework for addressing injunctions for FRAND-committed patents. The framework laid out by the Supreme Court in eBay, as interpreted by subsequent decisions of this court, provides ample strength and flexibility for addressing the unique aspects of FRAND committed patents and industry standards in general. A patentee subject to FRAND commitments may have difficulty establishing irreparable harm. On the other hand, an injunction may be justified where an infringer unilaterally refuses a FRAND royalty or unreasonably delays negotiations to the same effect... To be clear, this does not mean that an alleged infringer's refusal to accept any license offer necessarily justifies issuing an injunction. For example, the license offered may not be on FRAND terms. In addition, the public has an interest in encouraging participation in standard-setting organizations but also in ensuring that SEPs are not overvalued. While these are important concerns, the district courts are more than capable of considering these factual issues when deciding whether to issue an injunction under the principles in eBay.” 40
  41. 41. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Apple Inc. v Motorola, Inc. 2014 WL 1646435 (CAFC, 2014) “Applying those principles here, we agree with the district court that Motorola is not entitled to an injunction for infringement of the '898 patent. Motorola's FRAND commitments, which have yielded many license agreements encompassing the '898 patent, strongly suggest that money damages are adequate to fully compensate Motorola for any infringement. Similarly, Motorola has not demonstrated that Apple's infringement has caused it irreparable harm. Considering the large number of industry participants that are already using the system claimed in the '898 patent, including competitors, Motorola has not provided any evidence that adding one more user would create such harm. Again, Motorola has agreed to add as many market participants as are willing to pay a FRAND royalty. Motorola argues that Apple has refused to accept its initial licensing offer and stalled negotiations. However, the record reflects that negotiations have been ongoing, and there is no evidence that Apple has been, for example, unilaterally refusing to agree to a deal. Consequently, we affirm the district court's grant of summary judgment that Motorola is not entitled to an injunction for infringement of the '898 patent.” 41
  42. 42. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 42
  43. 43. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Oracle USA, Inc. v Rimini Street, Inc., 2014 WL 576097 (D.Nev. Feb 13, 2014) ¬ Was Rimini entitled to copy Oracle software onto its own computer systems to provide software support services to its customers by relying on their EULAs? ¬ ”Oracle's initial argument is premised on the flawed assumption that the rights to use and install the licensed software are restricted and tied solely to the specific software installation media delivered by Oracle, and is in direct contention with the express language of the City of Flint's license as well as federal copyright law. In the City of Flint's license, Oracle granted the City of Flint "a perpetual, non-exclusive, non-transferable license to use the licensed Software.“…"Software" is defined as "all or any portion of the then commercially available global version(s) of the binary computer software programs." Nowhere does the licensing agreement require the City of Flint to install the licensed software from the specific installation media provided by Oracle. Rather, the license grants the City of Flint the right to install and use "version(s)" of the licensed software. This is separate from, and in contrast to, a right to install and use only the provided software installation media.” 43
  44. 44. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Oracle USA, Inc. v Rimini Street, Inc., 2014 WL 576097 (D.Nev. Feb 13, 2014) ¬ “The court has reviewed the documents and pleadings on file in this matter and finds that the plain, unambiguous language of Section 1.2(b) does not expressly authorize Rimini to make copies of the licensed software. First, the plain language of Section 1.2(b) provides that only the City of Flint may make copies of the software. ("[the City of Flint] may [] make a reasonable number of copies . . ."). Nowhere does this provision authorize Rimini, as a third- party, to make a copy of the licensed software. ¬ Second, Section 1.2(b) authorizes copying of the software only for three very limited bases: (1) a use in accordance with the terms of the license; (2) archival and back-up purposes; and (3) disaster recovery testing purposes. Upon review of Rimini's use of the development environments associated with the City of Flint, the court finds that none of the environments were created for archival, emergency back-up, and/or disaster recovery purposes. Rather, the undisputed evidence establishes that these development environments were used to develop and test software updates for the City of Flint and other Rimini customers with similar software licenses.” 44
  45. 45. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Oracle USA, Inc. v Rimini Street, Inc., 2014 WL 576097 (D.Nev. Feb 13, 2014) ¬ Section 1.2(c) states that "[the City of Flint] may [] modify or merge the Software with other software." Rimini argues that because Section 1.2(c) allows for the City of Flint to modify the software, this provision necessarily authorizes Rimini to make a number of copies of the software to facilitate such modifications as a "use in accordance with the terms" of the license under Section 1.2(b)(i). ¬ However, the court finds that the right to modify the software pursuant to Section 1.2(c) does not authorize Rimini to make copies of the software. First, the court notes, once again, that the right to modify the software is granted solely to the City of Flint, and not to any third-party. Id. ("[the City of Flint] may [] modify . . . the software . . ."). Second, the right to modify the software is a separate and distinct right from from the right to reproduce the software…Thus, a grant of the right to modify the software does not automatically grant a right to reproduce that software.” 45
  46. 46. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Oracle USA, Inc. v Rimini Street, Inc., 2014 WL 576097 (D.Nev. Feb 13, 2014) ¬ “Rimini argues that Section 14.2 expressly authorizes third-party software support service providers, like itself, to make copies of the licensed software on its systems in order to carry out contracted support services with the City of Flint. The court disagrees. ¬ …the plain, unambiguous language of Section 14.2 only allows for the City of Flint to provide "access to and use of the Software." The right to access and use the licensed software is separate from a right to reproduce or copy the software, and there is no evidence before the court that Rimini, as a third party service provider, cannot perform its contracted services without having its own copy of the software on its own systems. Further, unlike other license provisions, the word "copy" is not found anywhere in Section 14.2. Therefore, the court finds that the plain language of Section 14.2 does not authorize copying of the licensed software.” 46
  47. 47. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Taxes of Puerto Rico, Inc v Taxworks, Inc. 2014 U.S.Dist. LEXIS 37765 (D.P.Rico. 2014) ¬ Enforceability of install wrap license. ¬ YOU AGREE THAT THIS AGREEMENT IS ENFORCEABLE LIKE ANY WRITTEN NEGOTIATED AGREEMENT SIGNED BY YOU.LICENSOR IS WILLING TO LICENSE THE SOFTWARE TO YOU ONLY ON THE CONDITION THAT YOU ACCEPT ALL OF THE TERMS OF THIS AGREEMENT. YOU PROVIDE YOUR CONSENT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT BY INSTALLING, LOADING OR OTHERWISE USING THE SOFTWARE. IF YOU DO NOT AGREE TO ALL OF THE TERMS AND CONDITIONS OF THIS AGREEMENT, DO NOT USE THE SOFTWARE. ¬ “If a "shrinkwrap" license agreement, where any assent on the part of the consumer is implicit, is valid, then it must logically follow that a "clickwrap" license agreement, where the assent is explicit, is valid..Here, the plaintiffs explicitly accepted the "clickwrap", or user agreement, when they clicked on the prompt stating "Accept & Install.“” 47
  48. 48. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Tremblay c. Canada (Orio Canada Inc)., 2013 CAF 225 ¬ “Any development done for Orio Canada Inc. shall become the exclusive property thereof and may not therefore be marketed or reused by Service Informatique Professionnel or any other party.” ¬ “Thus, the case law provides unanimously that we can not oppose the holder of a copyright assignment or exclusive licensee who is not evidenced by a writing signed by the holder of the right in question … ¬ However, these decisions do not deal with a case where the owner of the copyright recognized in court to have consented to the transfer of ownership of the right in question. It seems to me an exaggerated formalism that make ineffective against a transferor a transfer clause of copyright that he has written himself and recognizes court as governing its relations with the transferee, and this for the simple reason that it is not signed. As I mentioned earlier, the purpose of subsection 13 (4) and (7) of the Act, copyright is to protect the owner of the copyright assignment against a law that is not granted clearly. Where the transferee recognizes himself in court the assignment clause which governs its reports, the purpose of the Act is about me filled.” ¬ Orio, however, has not made ​​a cross-appeal against the decision of the judge trying the assignment of copyright is unenforceable to the caller. In these circumstances, it is not for this Court to reform this aspect of the judge's decision.” (Google translate) 48
  49. 49. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Tremblay c. Canada (Orio Canada Inc)., 2013 CAF 225 ¬ ”As to the implied license to use, I see no error in the judge's decision wanting that, given the circumstances, the appellant consented not only an implied license marketing SAM modified, but also to that can be changed by software Orio to improve marketing. In this regard, the decision of the Supreme Court of Canada in Netupsky c. Dominion Bridge , [1972] SCR 368 appears to me analogous to the present case… ¬ There is no doubt in my opinion that the parties had in mind that the modified SAM could not only be marketed, but that this program could also be future improvements at the request of Orio, and that these improvements could be made ​​either by calling or by a third party designated by Orio. Explicitly recognizing that "[a] ny development is Orio Canada inc. become the exclusive property "thereof, the appellant was in fact waived exclusivity on the development of all future enhancements audit program. The implied license arising from all relationships between the parties therefore allows Orio to copy the source code of SAM modified to do rework by third parties. The trial judge therefore did not err in so ruling.” (Google translate) 49
  50. 50. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Your Response Ltd v Datateam Business Media Ltd [2014] EWCA Civ 281 (14 March 2014) ¬ Must a database manager return data on contract termination and can it exercise a common law possessory lien over the database? ¬ “I would hold that the data manager was not entitled to exercise a common law lien on the database…it must have been implicit in the contract that when it came to an end the data manager was under an obligation to send the publisher by electronic means a copy of the database in its latest form…It was therefore in breach of contract in refusing to do so, unless the contract impliedly gave it a right to withhold that information from the publisher and to exclude the publisher from its systems until it had received payment of any outstanding fees. For my part I do not think that there is a sufficient basis for implying a term of that kind… ¬ Although in former times the law may have looked with favour on possessory liens as reflecting a form of natural equity, the parties to a contract of the kind under consideration in this case are free to make express provision for their rights and obligations on termination of their relationship and an extension of the right of self-help is to that extent less justifiable. In any event, for the reasons I have given I do not think it is open to us to take that course, even if we wished to.” ¬ Information cannot be property. See also, Fairstar Heavy Transport NV v Adkins & Anor [2013] EWCA Civ 886 (19 July 2013) 50
  51. 51. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 51
  52. 52. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Magill v. Expedia Inc., 2014 ONSC 2073 ¬ Did Expedia breach a contract by failing to disclose the details of its Tax recovery Charges and Service Fees. ¬ The Website Terms of Use state: “By accessing or using this Website in any manner, you agree to be bound by the [Website Terms of Use]. Please read the Agreement carefully.” ¬ “While completing the booking process, a customer wanting more information may choose to click on “Terms of Use” hyperlinks to open new windows containing the Website Terms of Use. If the customer accesses the link, he or she will find the following description or explanation of the Tax Recovery Charge and the Service Fees: ¬ The tax recovery charge on hotel accommodations is a recovery of the estimated transaction taxes (e.g. sales and use, occupancy, room tax, excise tax, value added tax, etc.) that Expedia pays to the hotel supplier in connection with your hotel reservations. … The actual tax amounts paid by Expedia to the hotel suppliers may vary from the tax recovery charge amounts, depending upon the rates, taxability, etc. in effect at the time of the actual use of the hotel by our customers. ¬ The service fees compensate Expedia for its costs in servicing your travel reservation. Our service fees vary based on the amount and type of hotel reservation. ¬ Expedia has no way of knowing whether a particular customer actually accessed the Website Terms of Use. Although the booking path specifies that by completing the booking, the customer has agreed to having read and accepted the Website Terms of Use, it is possible for customers to complete bookings and enter into Reservation Contracts without ever actually viewing the Website Terms of Use.” 52
  53. 53. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Magill v. Expedia Inc., 2014 ONSC 2073 ¬ Did customers agree to Expedia’s Terms of Use by entering into reservation contract? ¬ “Expedia’s first argument is that the language from the Terms of Use that explain the Tax Recovery Charge and the Service Fees do not part of the contract, the Reservation Contract, in which Expedia actually charges for “Taxes & Service Fees.” ¬ Expedia submits that the words from the Terms of Use are part of another contract; i.e. the contract that governs the use of its website. ¬ With respect, Expedia’s first argument makes no sense. Taxes & Service Fees are what Expedia charges as part of making hotel reservations and the question and answer language explaining what are those charges is an obvious part of the contract that makes those hotel reservations. Equally, the Terms of Use that are referred to in the Question and Answer are an obvious part of the Reservation Contract. ¬ I agree that the Terms of Use, standing alone, are a separate or discrete contract. The Terms of Use standing alone provide a contract for customers who use the website but who do not go on to make a hotel reservation. However, the Terms of Use in that separate contract become terms of the Reservation Contract for those customers that so make a Reservation Contract.” 53
  54. 54. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Magill v. Expedia Inc., 2014 ONSC 2073 ¬ “The questions upon which this class action are based turn on the language of the Terms of Use. More precisely, did Expedia breach the Reservation Contract by: (1) not disclosing whether the Taxes Fee was charged on the Retail Rate or the Wholesale Rate? (2) charging the Taxes Fee based on the Wholesale Rate? (3) not breaking out the Taxes and Service Fee into its components; or (4) not disclosing and by infusing a profit element into the Service Fee? The answer to all these questions are matters of contract interpretation… ¬ In my opinion, as a matter of contract interpretation the answer to all of the four questions set out above is “no”… ¬ The most straightforward explanation for why I agree with Expedia’s third and fourth arguments is that there is no words in the Reservation Contract expressing a promise by Expedia: (1) to disclose that the tax fee is charged on the Retail Rate or Wholesale Rate; (2) to charge the tax fee of the Wholesale Rate; (3) to disclose the tax charge and the service charge separately; and (4) to not include a profit element in the services charge.” 54
  55. 55. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Block v ebay, Inc 14 Cal. Daily Op. Serv. 3590 (9th.Cir.2014) ¬ Enforceability of term in user Agreement that stated "We are not involved in the actual transaction between buyers and sellers“. ¬ The first statement — "We are not involved in the actual transaction between buyers and sellers" — contains no promissory language… Rather, the statement is simply a general description of how eBay's auction system works. Although Block cites Lavi v. Pelican Investment Corp., 36 F. App'x 923 (9th Cir. 2002), and Multimatic, Inc. v. Faurecia Interior Systems USA, Inc., 358 F. App'x 643 (6th Cir. 2009), in arguing that legal obligations can be created through present-tense statements, these cases are distinguishable. See Lavi, 36 F. App'x at 924 (holding, in a context in which it was clear that the pertinent statements conveyed promises, a contract describing the sale of land in the present tense intended the property to be transferred in the future); Multimatic,358 F. App'x at 647-48 (interpreting a confidentiality agreement protecting trade secrets each side "possesses" to cover both pre-existing and future trade secrets).” 55
  56. 56. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 In re Zappos.com, Inc Customer Data Security Breach Litigation 2013 WL 4830497(D.Nev. Sep. 9, 2013) “The Court also dismisses the contractual claims. Plaintiffs allege that Zappos breached a contract to safeguard their data. But there is no allegation of any express or implied contract. The only allegations alleged to give rise to any contract are that customers agreed to pay money for goods and that statements on Zappos's website indicated that its servers were protected by a secure firewall and that customers' data was safe. The first type of contract for the sale of goods is not alleged to have been breached, and the unilateral statements of fact alleged as to the safety of customers' data do not create any contractual obligations, although if negligently or intentionally false, such statements can be the basis of misrepresentation claims in tort. The Court dismisses the contractual claims.” 56
  57. 57. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 In re: ONLINE TRAVEL COMPANY (OTC) HOTEL BOOKING ANTITRUST LITIGATION 953 F.Supp.2d 713 (N.D.Tex. 2013) ¬ “In the case at bar, it was impossible to complete a transaction on the Travelocity website in the absence of affirmative assent to the User Agreement. It is not, as Plaintiffs argue, necessary for the User Agreement to have a "scroll through" feature; the central issue is whether or not the users were "conspicuously presented with the agreement prior to entering into a contract." In the RealPage case, users attempting to install software updates were not required to scroll through the clickwrap license agreement. The RealPage court reasoned that the Barnett holding, which found a forum selection clause in a clickwrap agreement enforceable, did not require a "scrollthrough" feature for the contract to be valid, stating that "[i]t was [the user's] responsibility to read the electronically-presented contract, and he cannot complain if he did not do so." Id. (quoting Barnett, 38 S.W.3d at 204). Such reasoning is equally applicable here. Since the User Agreement was conspicuously presented and Plaintiffs assented to the User Agreement by clicking the "Accept" button to complete each online transaction, it is a valid clickwrap agreement.” ¬ See also, Starke v Gilt Groupe, Inc (S.D.N.Y. Apr. 24, 2014) (enforcing clickwrap where terms at link not read). 57
  58. 58. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 In re: ONLINE TRAVEL COMPANY (OTC) HOTEL BOOKING ANTITRUST LITIGATION 953 F.Supp.2d 713 (N.D.Tex. 2013) “Plaintiffs also argue that since Travelocity could at any time unilaterally modify the User Agreement and substantially change or revoke the arbitration clause, that clause, including its class action waiver, is illusory and unenforceable. The Court disagrees. While it is true that "an arbitration clause is illusory if one party can avoid its promise to arbitrate by amending the provision or terminating it altogether," Carey v. 24 Hour Fitness, 669 F.3d 202, 205 (5th Cir. 2012) (quoting In re 24R, Inc., 324 S.W.3d 564, 567 (Tex. 2010)) "[t]he crux of this issue is whether [the promisor] has the power to make changes to its arbitration policy that have retroactive effect."Id. Travelocity's User Agreement states that "Travelocity may at any time modify this User Agreement and your continued use of this site or Travelocity's services will be conditioned upon the terms and conditions in force at the time of your use." Unlike the clause in Carey, which was silent on the issue of retroactivity, see Travelocity's clause explicitly precludes retroactive application of any changes.” 58
  59. 59. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 5381 Partners LLC v Sharesale.com, Inc. 2013 WL 5328324, (E.D.N.Y., Sept. 23, 2013) ¬ “Plaintiff argues that it is not bound by the forum selection clause because the Merchant Agreement never appeared on the screen during sign up and activation. As to the fact that plaintiff had to click on a hyperlink to view the Merchant Agreement (rather than view the agreement on the same page where it had to indicate its assent to the terms), the Court agrees with the Fteja court's analogizing of this situation to cruise tickets — plaintiff was shown precisely where to access the Merchant Agreement before it agreed to them, and it should have clicked on them in the same way that one is expected to turn over a ticket to learn of its terms. Moreover, plaintiff was required to click to activate its account, and the button plaintiff was required to click appeared next to the statement, "By clicking and making a request to Activate, you agree to the terms and conditions in the Merchant Agreement." Thus, plaintiff had to click to denote its acceptance of the Merchant Agreement, which contained the forum selection clause. In such circumstances, "`[a] reasonably prudent offeree would have noticed the link and reviewed the terms before clicking on the acknowledgement icon.'“ ¬ See also, Zaltz v Jdate 952 F.Supp.2d 439 (E.D.N.Y.2013). 59
  60. 60. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Rudgayzer V Google Inc. 2013 WL 6057988 (E.D.N.Y. NOV 15, 2013) ¬ Enforcement of Google’s forum selection clause in clickwrap for Gmail related to Google’s alleged use of Gmail users’ public profiles in Buzz. ¬ ‘The forum-selection clause is enforceable. First, the forum-selection clause was reasonably communicated to the plaintiffs. Google requires all users, after seeing a screen listing the terms or a link to the terms, to agree to the terms of use before creating an email account. Agreements such as this — that require a user's assent as a prerequisite for using the services and are known as "clickwrap" agreements — are considered reasonably communicated.” 60
  61. 61. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 NEWELL RUBBERMAID INC. v. Storm, (Del. Ct. Ch. Mar. 27, 2014) “The Court concludes that Newell's method of seeking Storm's agreement to the post-employment restrictive covenants, although certainly not the model of transparency and openness with its employees, was not an improper form of contract formation. Storm, to accept her RSUs, was directed to a screen which informed her in several places that she was agreeing to the 2013 Agreements. Storm admits that she clicked the checkbox next to which were the words "I have read and agree to the terms of the Grant Agreement." This functions as an admission that she had the opportunity to review the agreement (even if she now states she did not read it despite her representation that she did) upon which Newell was entitled to rely. Her actions of clicking the checkbox and "Accept" button were manifestations of assent. She even admits that she clicked on the hyperlink which contained the restrictive covenants when she states that the procedures for accepting the 2013 Agreements were the same as the earlier RSU awards she accepted which included a pop-up screen with a "lengthy scrolling message which discussed [her] RSU award.“ Storm thus assented after being provided with, and after acknowledging, actual notice.” 61
  62. 62. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Discount Drug Mart, Inc v Devos, LTD 2013 WL 5820044 (N.D. Ohio. 2013) “The Court is persuaded that the terms and conditions contained on the website were not properly incorporated into the Distribution Agreement. "`Incorporation by reference is proper where the underlying contract makes clear reference to a separate document, the identity of the separate document may be ascertained, and incorporation of the document will not result in surprise or hardship.'“… In this instance, although the Distribution Agreement does make clear reference to another document (that being the terms and conditions contained on the website), incorporation of that "document" could clearly result in surprise or hardship, since Guaranteed Returns was free to unilaterally modify the Terms and Conditions at any time. Further, Guaranteed Returns concedes that it has modified the Terms and Conditions in the past. As Drug Mart correctly indicates, one party to contract may not modify an agreement without the assent of the other party. Moreover, there is no indication that the relevant terms were actually part of the Terms and Conditions at the time the parties executed the Distribution Agreement. The Court accordingly concludes that the contents of the website were not properly incorporated into the Distribution Agreement.” 62
  63. 63. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 SPAM Arrest, LLC v Replacements, LTD 2013 WL 4675919, (W.D. Wash., 2013) ¬ Claim by SPAM Arrest for $1.2 million for breach of agreement to pay $2,000 for 600 emails sent in violation of clickwrap agreement. The term was in an agreement at a link on a verification page which was squeezed between a CAPTCHA graphic and the box the for entry of the verification code: ¬ By clicking the "VERIFY" button above, and in consideration for Spam Arrest, LLC forwarding your e-mail (and any e-mails you may send in the future) to the intended recipient (the "Recipient"), you agree to be bound by the following Sender Agreement . . . . 63
  64. 64. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 SPAM Arrest, LLC v Replacements, LTD 2013 WL 4675919, (W.D. Wash., 2013) ¬ “In Sentient Jet's view, Spam Arrest cannot prove mutual assent to enter any Sender Agreement because no one who completes Spam Arrest's verification process knows that he or she is entering a contract. In Washington, "parties must objectively manifest their mutual assent" in order to form a contract… ¬ Among other things, the jury would consider whether Spam Arrest's use of a CAPTCHA tends to obscure the disclosure of the Sender Agreement. Sentient Jet offers evidence that the standard use of a CAPTCHA is not to indicate assent to a contract, but to differentiate humans from computers. It is possible (although far from certain) that objectively reasonable senders associate CAPTCHAs so strongly with their identification function that they do not notice Spam Arrest's use of the CAPTCHA as a means to manifest mutual assent. In short, factual disputes prevent the court from deciding whether senders who verified after October 2011 manifested assent to the Sender Agreement. Sentient Jet conceded as much at oral argument.” 64
  65. 65. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 SPAM Arrest, LLC v Replacements, LTD 2013 WL 4675919, (W.D. Wash., 2013) ¬ “Assuming that Spam Arrest could demonstrate that a Sentient Jet employee manifested assent to a Sender Agreement, it remains its burden to demonstrate that the employee had the authority to bind Sentient Jet… ¬ Employees who have authority to use corporate email addresses probably have authority to undertake certain acts incidental to sending email. Without additional evidence, however, no jury could conclude that this generic authority includes authority to enter a contract that imposes $2,000 in liquidated damages for every email sent in violation of the contract. It is not reasonable, either from the point of view of the employee or of Spam Arrest, to assume that the authority to engage in an act that typically costs nothing implies authority to bind the company to pay $2,000 for the same act. As a matter of law, Sentient Jet's authorization for its employees to use its email addresses did not vest them with actual or apparent authority to enter the Sender Agreement.” 65
  66. 66. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 BE, IN, Inc v Google Inc 2013 U.S.Dist. LEXIS 147047 (N.D.Cal. Oct. 13, 2013) ¬ Whether terms in browsewrap agreement prohibiting use, copying or distribution of contents at CamUp site could be used in claim against Google for trade secret misappropriation in its Hangouts part of Google+. ¬ “The Court finds that these pleadings are insufficient to establish contract formation because, as a matter of law, they do not establish grounds for the Court to find a manifestation of Defendants' mutual assent to the Terms of Service. Be In argues that the SAC properly alleges that Defendants agreed to the Terms of Service because of its conclusory statement that "Defendants agreed to [the Terms of Service] when they used and/or visited the CamUp website." … Defendants' mere use of the website can only serve as a manifestation of assent where Defendants had, or should have had, reason to know that mere use would be so interpreted… The SAC provides no grounds, beyond the mere existence of a link, for the Court to find that Defendants were put on notice that mere use of the website would be interpreted as agreement to the Terms of Service. The SAC does not allege the size or typeface of the link, the perhaps central or obvious location of the link on the page, or even the text of the link, but merely alleges the existence of such a link. Because browsewrap agreements, where enforceable, are a powerful means of binding users with very little affirmative assent, a complaint must state facts establishing the means by which the link in question would give notice to a reasonably prudent internet user.” ¬ See also, Sharon Roller v TV Guide Online Holdings 2013 Ark. 285 (Ark Sup.Ct. 2013) and IT Strategies Group, Inc. v Allday Consulting Group, LLC 975 F.Supp.2d1267 (S.F.Fla. 2013), (browsewraps not enforced); EDME v Internet Brands, Inc, 968 F.Supp.2d 519 (E.D.N.Y.2013) (forum selection clause not enforced where court could not tell what type of agreement was being asserted.) 66
  67. 67. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 AvePoint, Inc. v. Power Tools, Inc. , 2013 WL 5963034 (W.D.Va.,Nov. 7, 2013) “At this stage of the proceedings, the court is constrained to conclude that the facts set forth in the amended complaint are sufficient to plausibly allege the existence of an enforceable browsewrap agreement...AvePoint has alleged more than the mere existence of a link at the bottom of the AvePoint website. See Cvent Inc., 739 F.Supp.2d at 936 (holding that the plaintiff's “bare assertion[ ] that its terms of use were displayed on its website” was insufficient to establish that the defendants were on actual or constructive notice of those terms); Be In, Inc., 2013 WL 5568706, at *9, 2013 U.S. Dist. LEXIS 147047, at *33 (holding that the plaintiff failed to provide allegations from which the court could infer valid contract formation, where the plaintiff “merely allege[d] the existence of ... a link [to the website's terms and conditions]”). Instead, AvePoint cites additional facts to support its claim that Axceler had actual or constructive knowledge of the Website Terms and Conditions. Specifically, AvePoint contends that the fact that Axceler went to the trouble of creating a fictitious profile and email account in order to download the software suggests that Axceler had knowledge of the Terms and Conditions, and was aware that they prohibit users from downloading materials for commercial use. AvePoint also claims that Axceler has a similar browsewrap agreement on its own website that restricts the use of downloaded software and, thus, that it should have known that AvePoint's website has similar terms and conditions.” 67
  68. 68. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Forcelli v. Gelco Corp., 109 AD 3d 244 (N.Y. App. Div. 2nd Sept. 2013) ¬ “In the case at bar, Greene's email message contained her printed name at the end thereof, as opposed to an "electronic signature" as defined by the Electronic Signatures and Records Act… Nevertheless, the record supports the conclusion that Greene, in effect, signed the email message. In particular, we note that the subject email message ended with the simple expression, "Thanks Brenda Greene," which appears at the end of the email text. This indicates that the author purposefully added her name to this particular email message, rather than a situation where the sender's email software has been programmed to automatically generate the name of the email sender, along with other identifying information, every time an email message is sent… ¬ Accordingly, we hold that where, as here, an email message contains all material terms of a settlement and a manifestation of mutual accord, and the party to be charged, or his or her agent, types his or her name under circumstances manifesting an intent that the name be treated as a signature, such an email message may be deemed a subscribed writing within the meaning of CPLR 2104 so as to constitute an enforceable agreement.” 68
  69. 69. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Metro. Reg'l Info. Sys. v. AMER. HOME REALTY NET., 722 F. 3d 591 (4th. Cir. 2013) ¬ “A transfer of one or more of the exclusive rights of copyright ownership by assignment or exclusive license "is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner's duly authorized agent." 17 U.S.C. § 204(a)” ¬ “The issue we must yet resolve is whether a subscriber, who "clicks yes" in response to MRIS's electronic TOU prior to uploading copyrighted photographs, has signed a written transfer of the exclusive rights of copyright ownership in those photographs consistent with Section 204(a). Although the Copyright Act itself does not contain a definition of a writing or a signature, much less address our specific inquiry, Congress has provided clear guidance on this point elsewhere, in the E- Sign Act.” ¬ “To invalidate copyright transfer agreements solely because they were made electronically would thwart the clear congressional intent embodied in the E-Sign Act. We therefore hold that an electronic agreement may effect a valid transfer of copyright interests under Section 204 of the Copyright Act. Accordingly, we agree with the district court that MRIS is likely to succeed against AHRN in establishing its ownership of copyright interests in the copied photographs.” 69
  70. 70. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 70
  71. 71. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 In the Matter of a WARRANT TO SEARCH A CERTAIN E– MAIL ACCOUNT CONTROLLED AND MAINTAINED BY MICROSOFT CORPORATION 2014 WL 1661004 (S.D.N.Y. Apr. 25, 2014) ¬ Microsoft moved to quash a search warrant to the extent that it directed it to produce the contents of one of its customer's e-mails where that information was stored on a server located in Dublin, Ireland. Microsoft contended that courts in the United States are not authorized to issue warrants for extraterritorial search and seizure. ¬ “It has long been the law that a subpoena requires the recipient to produce information in its possession, custody, or control regardless of the location of that information...To be sure, the “warrant” requirement of section 2703(a) cabins the power of the government by requiring a showing of probable cause not required for a subpoena, but it does not alter the basic principle that an entity lawfully obligated to produce information must do so regardless of the location of that information. ¬ This approach is also consistent with the view that, in the context of digital information, “a search occurs when information from or about the data is exposed to possible human observation, such as when it appears on a screen, rather than when it is copied by the hard drive or processed by the computer.”” 71
  72. 72. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Joffe v Google, Inc. 729 F.3d 1262 (9th.Cir.2013) ¬ Whether Google is liable under the Wiretap Act for capturing Street View photographs from unencrypted Wi-Fi networks. Specifically, was the data transmitted over a Wi-Fi network an "electronic communication" that is "readily accessible to the general public" and exempt under the Act? ¬ “The payload data transmitted over unencrypted Wi-Fi networks that was captured by Google included emails, usernames, passwords, images, and documents that cannot be classified as predominantly auditory. They therefore fall outside of the definition of a "radio communication“. ¬ “Wi-Fi transmissions are not "readily accessible" to the "general public" because most of the general public lacks the expertise to intercept and decode payload data transmitted over a Wi-Fi network. Even if it is commonplace for members of the general public to connect to a neighbor's unencrypted Wi-Fi network, members of the general public do not typically mistakenly intercept, store, and decode data transmitted by other devices on the network. Consequently, we conclude that Wi-Fi communications are sufficiently inaccessible that they do not constitute an "electronic communication... readily accessible to the general public" under 18 U.S.C. § 2511(2)(g)(i) as the phrase is ordinarily understood.” 72
  73. 73. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Vidal -Hall & Ors v Google Inc [2014] EWHC 13 (QB) (16 January 2014) ¬ Is Google liable for collecting and displaying users’ personal information in targeted advertising on users computers by using cookies that circumvented Safari default browser cookie blocking settings? ¬ “There is no dispute that, following the discovery of how Google Inc had been collecting the information from Safari browsers in the Relevant Period, Google Inc has faced regulatory sanctions in the USA. In August 2012 it agreed to pay a civil penalty of US$22.5 million to settle charges brought by the United States Federal Trade Commission ("FTC") that it misrepresented to certain users of the Safari browser that it would not place tracking cookies or serve targeted advertisements to those users. Further, on 11 November 2013 it agreed to pay US$17 million to settle US state consumer-based actions brought against it by United States attorneys general representing 37 US states and the District of Columbia. In addition, the Defendant was required to give a number of undertakings governing its future conduct in its dealings with users in the USA.” 73
  74. 74. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Vidal -Hall & Ors v Google Inc [2014] EWHC 13 (QB) (16 January 2014) ¬ Mr White submits that the Browser-Generated Information was not private. It is anonymous… ¬ “I find this a surprising submission to be made on behalf of Google Inc. It would not collect and collate the information unless doing so enabled it to produce something of value. The value it produces is the facility for targeted advertising of which the Claimants complain, and which yields the spectacular revenues for which Google Inc is famous… ¬ At the point at which the advertisement is visible on a user's screen, the user is likely to be identifiable to a third party viewer… ¬ But what is specific about the complaints in this case is that the information that was, or may have been, apparent from the screens was, on particular occasions, private information. The particular types of information specified in each of the Confidential Schedules is information for which each Claimant has a sufficiently strong case that that information was private… ¬ In my judgment the Claimants have a sufficiently good case on this point that it would be wrong to set aside the Master's order in relation to the claims for misuse of private information.” 74
  75. 75. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 In Re: Google Inc. Cookie Placement Consumer Privacy Litigation 2013 WL 5582866 (D.Del. Oct 9, 2013) ¬ Whether Google liable for circumventing Apple Safari and/or Internet Explorer browser blockers into accepting cookies to allow to display targeted advertising. (“Google stopped only when caught and began removing the illicit cookies.”) ¬ “Plaintiffs argue that defendants intercepted both transactional information and "contents," such as the URLs and "information that Class Members exchanged with first-party websites during the course of filling out forms or conducting searches." Most of this information cannot be characterized as "contents." Specifically, "personally identifiable information that is automatically generated by the communication" is not "contents" for the purposes of the Wiretap Act… ¬ Even if plaintiffs' browsers were "tricked" into sending the URLs to Google, the court concludes that Google did not intercept contents as provided for by the Wiretap Act. Given this legal obstacle, defendants' motions to dismiss are granted.” 75
  76. 76. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 In Re: Google Inc. Gmail Litigation 2013 WL 5423918 (N.D. Cal. Sep. 26, 2013) ¬ Whether Google is liable under US Wiretap Act for intercepting, reading, and collecting contents of emails to create user profiles and provide users with ads? ¬ Section 8 of the Terms of Service that were in effect from April 16, 2007, to March 1, 2012, stated that "Google reserves the right (but shall have no obligation) to pre-screen, review, flag, filter, modify, refuse or remove any or all Content from any Service. This sentence was followed by a description of steps users could take to avoid sexual and objectionable material. ("For some of the Services, Google may provide tools to filter out explicit sexual content."). Later, section 17 of the Terms of Service stated that "advertisements may be targeted to the content of information stored on the Services, queries made through the Services or other information." ¬ The Court finds that Gmail users' acceptance of these statements does not establish explicit consent… This does not suggest to the user that Google would intercept emails for the purposes of creating user profiles or providing targeted advertising.” 76
  77. 77. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 In Re: Google Inc. Gmail Litigation 2013 WL 5423918 (N.D. Cal. Sep. 26, 2013) ¬ Did third party users by agreeing to its Terms of Service and Privacy Policies consent to Google reading their emails? ¬ “Google has cited no case that stands for the proposition that users who send emails impliedly consent to interceptions and use of their communications by third parties other than the intended recipient of the email. Nor has Google cited anything that suggests that by doing nothing more than receiving emails from a Gmail user, non-Gmail users have consented to the interception of those communications. Accepting Google's theory of implied consent — that by merely sending emails to or receiving emails from a Gmail user, a non-Gmail user has consented to Google's interception of such emails for any purposes — would eviscerate the rule against interception…The Court does not find that non-Gmail users who are not subject to Google's Privacy Policies or Terms of Service have impliedly consented to Google's interception of their emails to Gmail users.” ¬ See, In re Google Inc. Gmail Litigation, 2014 WL 1102660 (N.D.Cal. Mar 18, 2014) (Class certification denied because implied consent issues predominate). 77
  78. 78. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 PIPEDA Report of Findings #2014-001OPC ¬ Report of Findings: Use of sensitive health information for targeting of Google ads raises privacy concerns. ¬ “The complainant indicated that he was followed over a period of a month, which is inconsistent with Google’s claim that advertisements are delivered based on pages recently visited during the same browsing session. Our technical analysis confirmed this, also showing that advertisements related to CPAP devices appeared for a week, representing the longest test period. ¬ Google’s privacy policy states “[w]e use information collected from cookies and other technologies, like pixel tags, to improve your user experience and the overall quality of our services […] When showing you tailored ads, we will not associate a cookie or anonymous identifier with sensitive categories, such as those based on race, religion, sexual orientation or health”. ¬ Since we are of the view that the advertisements served by Google in this case were tailored based on a personal health interest, Google is delivering tailored ads in respect of a sensitive category, in this case, health. In our view, this practice does not correspond to the actual wording of the privacy policy as outlined above.” 78
  79. 79. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 PIPEDA Report of Findings #2014-001OPC ¬ “Our Office is of the view that meaningful consent is required for the delivery of OBA. As stated in our Office’s OBA guidelines, implied or opt-out consent for OBA purposes may be acceptable provided that the information collected and used is limited, to the extent practicable, to non-sensitive information (avoiding sensitive information such as medical or health information). ¬ The complainant was searching information related to a medical device used to treat sleep apnea. Given that this complaint relates to personal health information (i.e. online activities and viewing history of health related websites), our Office is of the view that such information is sensitive. Therefore, implied consent for the collection or use of the complainant’s sensitive personal health information for the purpose of delivering ads based on the complainant’s online behaviour is not appropriate, and express consent is required. ¬ Since Google did not seek express consent in the circumstances, we are of the view that in this context, Google has contravened Principles 4.3 and 4.3.6 of the Act.” 79
  80. 80. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Yunker v Pandora Media, Inc, 2014 U.S.Dist.Lexis 30829 (N.D.Cal.2014) ¬ “Pandora's Privacy Policy provides, in part, that it may: “use and share non- personally identifiable information, such as general demographic or location information, or information about the computer or device from which you access [the Pandora App]. Additionally, we may de-identify personally identifiable information and share it in a de-identified or aggregated form with third parties, advertisers and/or business partners in order to analyze [Pandora] usage, improve the Pandora Services and your listener experience, or for other similar purposes… ¬ Pandora argues that the Privacy Policy is not a contract. Plaintiffs allege that they transmitted PII, which has value to Pandora, in exchange for use of the Pandora App and a promise that Pandora would use that information in accordance with the terms of its Privacy Policy. Based on these allegations, and at this stage of the proceedings, the Court concludes that Plaintiffs sufficiently allege a contract existed…Thus, Plaintiffs allege that because Pandora used and transmitted PII in a manner that did not comport with the terms of the Privacy Policy, they incurred overage charges on their data and memory plans, i.e. they suffered damage as a result of the alleged breach. Once again, although Plaintiffs may face an uphill battle proving this claim, they have stated a claim.” 80
  81. 81. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 81
  82. 82. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Cinar Corporation v. Robinson, 2013 SCC 73 82
  83. 83. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Cinar Corporation v. Robinson, 2013 SCC 73 “The approach proposed by the Cinar appellants is similar to the “abstraction-filtration-comparison” approach used to assess substantiality in the context of computer software infringement in the United States: see Computer Associates International, Inc. v. Altai, Inc., 982 F.2d 693 (2nd Cir. 1992)… It has been discussed, though not formally adopted, in Canadian jurisprudence: Delrina Corp., at paras. 43-47. I do not exclude the possibility that such an approach might be useful in deciding whether a substantial part of some works, for example computer programs, has been copied. But many types of works do not lend themselves to a reductive analysis. Canadian courts have generally adopted a qualitative and holistic approach to assessing substantiality. “The character of the works will be looked at, and the court will in all cases look, not at isolated passages, but at the two works as a whole to see whether the use by the defendant has unduly interfered with the plaintiff’s right…” 83
  84. 84. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Distrimedic inc. c. Dispill Inc., 2013 FC 1043 ¬ Is The Dispill Label Form Susceptible To Copyright Protection? ¬ “I am prepared to accept that what Richards really seems to be referring to by the term “Dispill Label Form” is a series of entry screens from a software program written in the DOS language”. ¬ ‘There is no dispute between the parties that a form does not have to be on a paper support and that a computer screen (which in any event can be printed) falls within the definition of a “work” for the purposes of the Copyright Act, and can therefore be protected. Similarly, the Defendants to the Counterclaim do not dispute that the DOS Dispill Label Form is a literary work.” 84
  85. 85. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Distrimedic inc. c. Dispill Inc., 2013 FC 1043 ¬ “There are…problems preventing the recognition of copyright in the Dispill Label Form… the selection of the information for the DOS Dispill Label Form bears a very low degree of originality, as it is mostly dictated by provincial legislation on the labelling of prescription drugs, both in Quebec and Ontario, where the parties’ products are mainly sold… ¬ In the case at bar, I have not been convinced that the selection of information and its arrangement in the DOS Dispill Label Form required of its author the type of skill and judgment deserving of copyright protection. It may be, as suggested by counsel for Richards, that Dispill was the first to create a method of generating the necessary patient information for printing on each cell of a pill dispenser. This cannot be the subject of copyright protection, however, as it would amount to creating a monopoly on an idea or method, which the law does not permit.” 85
  86. 86. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Distrimedic inc. c. Dispill Inc., 2013 FC 1043 ¬ “The asset purchase agreement whereby Mr. Bouthiette sold his business to his company Dispill Inc., dated January 1, 1998, makes no mention of any copyright in the Dispill Label Form… ¬ In the present case, I do not think that the Clause 1 of that Agreement, stating that “[l]e vendeur vend à l’acquéreur, qui l’achète, son entreprise de vente d’un système de dispensateur de médicaments, connue sous le nom de DISPILL…”[Google translate: “the seller sells to the purchaser, who buys his company sales system dispensing of medicines, known as the DISPILL”], explicit enough to encompass the alleged copyright in the Dispill Label Form. This is made even clearer by the description that is given of that enterprise in that same clause, which explicitly refers in Section C to the invention in the patent. It doesn’t appear, therefore, that the parties to the agreement had the Dispill Label Form and the copyright possibly attaching thereto in mind, particularly as they made no reference to it despite referring explicitly to the patent.” 86
  87. 87. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 (AOM) NA Inc. et al v. Reveal Group, 2013 ONSC 8014 ¬ “Copyright is a very specific right attaching to a “work”. I agree with the defendants that the pleading is vague about what it is that is subject to copyright and what it is alleged has been the breach of copyright giving rise to this cause of action. Copyright cannot attach to an idea such as a method. It can of course attach to the manuals or other material in which the method is described. Similarly with computer software, copyright can attach to source code, to a graphic user interface, to manuals and to other material as defined in the Act. Copyright cannot attach simply to what a computer program does. The plaintiff must specify what it is that is covered by copyright and what it alleges has been done that gives rise to the statutory remedies. ¬ On this point the defendant is successful. The claim for copyright breach will be struck out with leave to amend.” 87
  88. 88. McCarthy Tétrault S.E.N.C.R.L., s.r.l. / mccarthy.ca 13440957 Voltage Pictures LLC v. John Doe, 2014 FC 161 ¬ “Privacy considerations should not be a shield for wrongdoing and must yield to an injured party’s request for information from non- parties. This should be the case irrespective of the type of right the claimant holds. The protection of intellectual property is ipso facto assumed to be worthy of legal protection where a valid cause of action is established. There is little dispute with the correctness of this assertion. Copyright is a valuable asset which should not be easily defeated by infringers. The difficulty in this case is that it is not clear that the protection of copyright is the sole motivating factor supporting Voltage’s claim in this Court.” ¬ Subscriber data ordered to be provided on terms. 88

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