SEMPO Ottawa Presentation James Katz - October 18 2012

Legal Issues Related to Internet Search:

From a Canadian Perspective

Tonight’s Agenda

1. Canadian Law and Internet Search2. Introduction to Trade-Marks 3. Domain Name Disputes4. Copyright and Cyber-Libel 5. Conclusion and Words of Advice

The key questions we will address today:

When Looking at your total Internet presence, including your domain name and webpage content:

1. Am I at risk? 2. What is the nature of that risk?3. What can be done to mitigate that risk?

Part 1: Canadian Law and Internet Search

Laws to be aware of when considering how you market your business on the Internet:

Canadian Statutory Law

1. Trade-Marks Act2. Copyright Act3. Competition Act

Part 1: Canadian Law and Internet Search

The Common Law Torts (Judge Made Law)

1.Passing Off2.Trade Slander3.Defamation

Part 1: Canadian Law and Internet Search

Trade-Marks Act Rooted in the Common Law Tort of Passing Off Designed to Protect Consumers from confusion Regulates the acquisition and enforcement of

trade-mark rights in Canada Largely unchanged since 1985 Also contains provisions dealing with unfair

competition

Part 1: Canadian Law and Internet Search

Copyright ActCopyright is said to subsist in any originally created artistic, literary, dramatic or musical work, and confers upon the owner of the copyright the sole right to produce and reproduce those works, or a substantial part of those works in any material form. Copyright includes the right to communicate a literary, artistic, dramatic or musical work by

telecommunication “Telecommunication” includes the Internet The general term of copyright lasts for 50 years, plus the life of the author Is solely a creature of statute Amendments to the Copyright Act that directly impact the Internet will soon come into force Copyright exists the moment an original work is created Does not need to be registered

Part 1: Canadian Law and Internet Search

Competition Act Regulates and protects the public from unfair trade practices, including how a business can market its products and services

Section 52 provides that: No person shall, for the purpose of promoting, directly or indirectly,

the supply or use of a product or for the purpose of promoting, directly or indirectly, any business interest, by any means whatever, knowingly or recklessly make a representation to the public that is false or misleading in a material respect.

Violation of the Act can result in severe civil, criminal or regulatory sanctions

Part 1: Canadian Law and Internet Search

Passing OffConsists of the misrepresentation by one person of his wares, services or business so as to create a pretence that they are sponsored by or associated with the wares, services or business of another person in such a way as to misappropriate the goodwill therein, causing damage. ▪Does not require that the misrepresentation be intentional ▪Only the likelihood of public confusion need be proven▪Often called common law trade-mark infringement

Part 1: Canadian Law and Internet Search

Trade-SlanderThe malicious publication of a false statement disparaging the goods of another, causing special damage.

Malice may be inferred by the nature of the misrepresentation itself Up to the plaintiff to prove that the statement is false Actual damages must be proven Publication is the communication to the public: it does not have to be in

print Does not protect against “puffing” Often occurs in the context of comparative advertising Also called trade-libel or malicious falsehood

Part 1: Canadian Law and Internet Search

DefamationThe publication of a statement that lowers the reputation of an individual in the eyes of the public such that the individual is regarded with feelings of hatred, ridicule, contempt, fear or dislike.Once alleged, it is up to the defendant to prove that the statements are substantially true Once established, damages are presumed, and can be substantial Applies to any form of Internet communication, including email, blogs and chat rooms Applies to the author of the statement, as well as to those who publish or disseminate the statement

Part 1: Canadian Law and Internet Search

Specific Internet Issues that May Trigger Legal Liability

1. Domain Name Confusion Trade-Mark Infringement

Passing Off

Unfair Competition

Domain Name Dispute Resolution Policies

2. Webpage Content Trade-Mark Infringement

Passing Off

Trade Slander and/or Defamation

Copyright Infringement

Part 2: What is a Trade-Mark?

A trade-mark is a sign or token, a character, device or label, brand seal or the like that is used in association with wares or services in order to distinguish the trader of those goods and services in the marketplace. Often referred to as a “Brand”, “Slogan” or “Logo” A valid trade-mark confers a monopoly on its owner to use that mark in commerce

in association with goods and services Cannot be clearly descriptive of the wares or services with which it is associated Cannot be a person’s name Trade-mark rights begin as soon as you start to use the mark, either by selling

wares that display the mark or by delivering or advertising services in association with the mark

May be registered or unregistered

Part 2: What is a Trade-Mark?

Some Famous Trade-Marks

Part 2: What is a Trade-Mark?

Trade-Mark Use“Use” defines not only who owns a trade-mark but

who may be infringing it “Use” occurs when a trade-mark is marked on wares or their

packaging at the time of the transfer of the property in or possession of those wares

“Use” in association with services occurs when the mark is displayed in the performance or advertising of those services

The first to “use” a trade-mark owns it A person who “uses” a trade-mark that is confusing with another

pre-existing trade-mark is said to be infringing the rights of the prior user

Part 2: What is a Trade-Mark?

Trade-mark use and infringement on the Internet may occur if the trade-mark:

1. Appears in website content2. Comprises all or the distinctive part of a

Domain Name3. Is used as a metatag4. Is purchased and used as part of an Adwords

campaign*

Part 2: What is a Trade-Mark?

In the Internet context, “use” in association with wares only occurs when a website is an “active” and not a “passive” website An “active” website is one through which the

purchase of goods can take place and the transfer of ownership in those goods can take place

Part 2: What is a Trade-Mark?

Advertising services through a passive website that displays a confusingly similar trade-mark can constitute trade-mark infringement

Part 3: Domain Name Disputes

A domain name is an alpha-numeric string used to identify space and ownership on the Internet

An important function of domain names is to provide easily recognizable and memorizable names to numerically addressed Internet resources

Domain names are often wholly comprised of:a) A trade-mark, or

b) A trade-name

Part 3: Domain Name Disputes

The Ontario Court of Appeal ruled in 2011 that a domain name is a form of intangible personal property, given that: It’s owner has the right to exclude others from

using it; and It is definable and recognizable

A Domain Name therefore is a business asset that has value

Part 3: Domain Name Disputes

Domain Name Dispute Resolution Procedure

Available to force the cancelation or transfer of Domain Names that are wholly or in part comprised of, or are confusingly similar to, a complainant’s trade-mark or trade-name

A form of binding arbitration Similar in application in both the ICANN and CIRA registration

systems Relatively quick and cheap (compared to the court system)

Part 3: Domain Name Disputes

Under the CIRA Domain Name Dispute Resolution Policy (version 1.3), in order to force the transfer or cancelation of a Domain Name, a complainant must prove: (a) the Registrant’s dot-ca domain name is confusingly similar to a trade-mark in which the complainant had rights prior to the date of registration of the domain name and continues to have such rights; and

(b) the Registrant has registered the domain name in bad faith; and the Complainant must provide some evidence that:

(c) the Registrant has no legitimate interest in the domain name

Part 3: Domain Name Disputes

Establishing “Bad Faith” Requires proving:

a) the Registrant acquired the domain name in order to sell it back to the complainant at a profit;

b) the Registrant, as part of a pattern of registering domain names, has done so in order to prevent trade-mark owners from obtaining those domain names

c) the Registrant obtained the domain name primarily to disrupt the business of the complainant; and

d) a Registrant obtains a domain name in order to direct Internet traffic to it (for commercial gain) by creating a likelihood of confusion with the complainant’s trade-mark.

These criteria are not exhaustive

Part 4: Copyright and Cyber-Libel

Recent Copyright Issues Related to Website Content

A website with a substantially similar layout, appearance, graphics and content can infringe copyright and be considered passing off

User activated hyperlinks to third party website content are not copyright infringement

Canada’s new Copyright Act will soon be in force

Part 4: Copyright and Cyber-Libel

The “notice and notice” regime in brief Written notice from a copyright owner to an ISP detailing the

online copyright infringement The ISP is required to deliver that notice to its user of copyright

infringement The ISP must keep records of the user’s identity and provide

them to the complainant if infringement proceedings are commenced

The ISP may attract liability and have to pay the complainant damages if it does comply with its statutory obligations

Most major ISPs already have a similar system in place to assist copyright owners

Part 4: Copyright and Cyber-Libel

Cyber-Libel is a growing phenomenon, and involves all aspects of Internet based publications

Canadian Courts will take jurisdiction over Cyber-Libel that originates outside of Canada, but

U.S. Courts will likely not enforce a Canadian defamation judgment

Canadian Courts have recently developed processes to “out” anonymous defamers

Part 5: Conclusions and Recommendations

To protect your business and yourself from liability, an audit of your Internet presence is advised, and should consider:

1. Your Domain Name and “blocking” registrations of relevant Domain Names that are similar in sound and appearance to yours

2. The ownership of copyright in your website’s content3. Your use of metatags or AdWords that may be confusingly similar

to existing trade-marks or trade-names4. The nature of your website content that refers to third party

individuals or businesses in the context of libel, trade-slander and unfair competition laws

Part 5: Conclusions and Recommendations

(Continued)

5. Reviewing what others are saying about your business online6. Researching the existence of confusingly similar Domain Names 7. Registering your trade-marks and copyright 8. Ensuring that you adequately police third party content that can

be posted directly to your website (i.e. user comments)

Contact Info

James Katz- [email protected]

Tweet @OttawaIPLaw

Trina Fraser- [email protected]:

The information contained in this presentation is for general guidance only. The application and impact of laws can vary widely based on the specific facts involved. Given the changing nature of laws, rules and regulations, this information should not be used as a substitute for consultation with legal, accounting or other competent advisers. Before making any decision or taking any action, you should seek professional advice.