Class Action Lawsuits? There’s an app for that.

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A California court has approved a nationwide class action lawsuit against Apple, based on claims that the device has tracked user location and movements without their consent. This is the same claim that was dismissed once, with leave to amend (see App Law: Update on Privacy). The plaintiffs amended and came back for round two. In a partial win for Apple, the privacy claims were dismissed. However, the remainder of the claims have been permitted to proceed. Apple’s defence is that its terms of service and user agreements will provide cover. The court has indicated that there is some ambiguity about whether the terms cover the scope of information that was collected.

For Apple’s lawyers, this is not a new phenomenon. These lawsuits are also in the works:

However, the user-tracking lawsuit looks like the most interesting of the bunch, and may put Apple’s app store terms and conditions to the test.

Calgary – 07:00 MDT

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Copyright Protection for APIs

 

As a follow-up to our earlier article (SDKs and APIs: Do they have copyright protection?), the jury in the Oracle v. Google lawsuit issued a decision last week that Google’s Android software infringed copyright in the overall structure, sequence and organization of Oracle’s Java code. However, the jury failed to return a decision on Google’s “fair use” defence. Oracle’s main complaint was that Google’s Android software used Java code – in particular, 37 Java APIs (application programming interfaces) – that was not properly licensed from Oracle. Google has maintained that the use of any Java APIs in Android is protected by a “fair use” defence.

You’d think a jury decision would be a step forward. However, the issue of copyright protection of APIs remains unsettled, since the jury merely assumed copyright protection for the purposes of this issue, without a clear decision by the court on that point. The failure to decide on the “fair use” defence also leaves the issue open. The jury was deadlocked on that question, potentially leading to a mistrial. Indeed, Google filed for a new trial last week.

This jury decision is really just a way-station on the road… a very long road. The next phase of the lawsuit will deal with Oracle’s patent infringement claims; which will be followed by a further hearing to determine any damages. Stay tuned.

Related Reading: Copyrightability of Java APIs would be consistent with law and practice, not a ‘substantial departure’ for industry (FOSS Patents)

Calgary – 07:00

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Licensing: The Good, The Bad, and The Virtual

 

Virtual desktops running on the cloud (Desktop-as-a-Service or DaaS, if you need another acronym) have delivered desktop-style computing to mobile devices such as iPads and Android tablets. This is a way to remotely access the full functionality of a desktop (such as track-changes in MS Word, which is currently impossible on an iPad). This is the subject of a recent spat between OnLive, tuCloud and Microsoft. This dispute – a dramatic one in which tuCloud openly dared Microsoft to sue it – has focussed attention on the fine-print in Microsoft’s licensing regime under its Service Provider License Agreement. In a broader sense, it impacts any virtualization. When can a licensee of software deliver virtual access to multiple instances of that software, and how does the software vendor control such access? 

This dispute is one which will be watched closely as it develops. Software vendors should review their terms and their licensing models to ensure that they have contractual terms that match the current virtualization risks and opportunities that come with DaaS. 

For a related event, please join us for “Software Licensing: The Good, The Bad, and The Virtual“ on May 31, 2012.

Calgary – 14:00 MDT 

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The Cloud: What goes up must come down

 

A recent Gmail outage reminds us that the cloud is not always up. What goes up must come down. Servers crash. Companies go bankrupt. When a cloud service provider fails or the technology falters, what happens to the servers that house the data?  Think of where your cloud-based data is hosted… and then try to imagine what it would take to get that data back. In these cases, questions of jurisdiction and bankruptcy law quickly come to the fore.

In the ongoing case involving Megaupload, a court battle is being fought over the servers: who will take conduct of them and what’s to be done with the data on those servers?

The Canadian case of Stanford International Bank Ltd. (Syndic de), 2009 QCCS 4106 (CanLII), also involved a dispute over servers of a bankrupt company. In the Stanford International case, the bankrupt company was offshore. A liquidator acting for receivers based in Antigua sought an order from a Canadian court to confirm the winding-up order. However, the court objected when it discovered that the servers, located in Canada, had been erased by the Antiguan receivers, the data had been copied, and the copies were stored in Antigua. Essentially, the Antiguan receivers removed all the electronic data from the Canadian servers to Antigua, thus removing the data from the jurisdiction of Canadian courts and regulatory authorities.

The number of servers in that case was small enough to permit copying; compare that to the Megaupload case which involves some 1100 servers. No-one wants to incur the cost to house and maintain such a large number of servers, so they are in legal limbo until the court makes a ruling.  

In some cases, the data sits on identifiable servers – you could in theory (if you know where the server farm is located) point to a box and say, that’s where my data is stored. In other cases, such as Amazon’s “Elastic Compute Cloud” Service, high levels of redundancy mean the same data may appear in multiple instances across multiple servers, located in multiple geographical areas. It would be impossible even in theory to determine where the data is physically located. When negotiating mission-critical cloud-computing agreements, take time to consider the issues of what happens when the cloud comes down, and get proper advice for a soft landing.

Calgary – 07:00 MDT

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Changing Online Terms Midstream

 

Cloud service providers often want to change online terms in the middle of the product lifecycle. Amendments are typically required due to changes in the law or changes in product functionality. For example, Apple’s introduction of its iCloud service triggered changes to the iTunes terms of use. If users want access to the new functionality, they must assent to the revised terms. It amounts to a midstream unilateral change to the contract. Do these changes hold up in court? Two recent US cases suggest there is a valid way to effect such changes:

  • In Fineman v. Sony Network Entertainment (N.D. Cal.; Feb. 9, 2012), consumers objected to Sony’s amendments to the online terms governing the Sony PlayStation Network. The changes were challenged and ultimately upheld in court. 
  • In Lebowitz v. Dow Jones & Co., 06 Civ. 2198 (MGC) (S.D.N.Y.; Mar. 12, 2012), a New York court permitted unilateral changes to the terms and pricing for the WSJ Online subscription service. This turned, in part, on the terms of the original contract, which permitted the vendor to make reasonable changes to the terms as long as notice was provided to the user. For further discussion, see Eric Goldman’s post.)
  • In Canada, this issue was addressed in the leading case of Kanitz v. Rogers Cable Inc., 2002 CanLII 49415 (ON SC), in which a Canadian court upheld a change in the online terms imposed on Rogers internet customers.

Note: software vendors and cloud service providers need to be cautious about forcing users to waive class-action rights. Such amendments can conflict with local consumer-protection laws. Unilateral changes need to be managed carefully. Get advice before you attempt to impose unilateral changes to ensure the best outcome. 

Calgary – 07:00 MDT

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Online Agreements: Click-Through Upheld

 

If your kids use Facebook, are they bound by the online terms?

This question was recently reviewed in a US decision in which certain minor children, resident in Illinois, were users of facebook.com. They alleged that Facebook’s practice of misappropriating their names and likenesses for “commercial endorsements” without their consent was a violation of their privacy rights. Facebook resisted by invoking the “forum-selection” clause in its Terms of Service (TOS). That clause effectively punts all disputes into California, Facebook’s home turf. The Illinois court had to decide whether the case could proceed in Illinois, or whether the forum-selection clause dictated that the case must proceed in California.

In E.K.D. v. Facebook, Inc., 3:12-cv-01216-JCS (S.D. Ill. March 8, 2012), the Court concluded that the minors could not avoid the forum-selection clause in Facebook’s TOS. A mandatory forum-selection clause is, under US law, valid on its face, and should be enforced “unless enforcement is shown by the resisting party to be ‘unreasonable’ under the circumstances.” Canadian law is similar. However, the courts look at a number of factors in determining what they consider “reasonable”, and online vendors or licensors must take care if they want to ensure the clause will be upheld.

Calgary – 07:00 MDT

 

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When an iPhone App Makes False Claims

 

Snake oil? There’s an app for that. App developers who make baseless health-related claims about their apps may face FTC charges in the US.

In this case, the mobile apps “AcneApp” and “Acne Pwner”, sold in Apple’s iTunes Store and Google’s Android Marketplace, made false health-related claims without scientific evidence. Advertising for the apps claimed to treat acne with colored lights emitted from the phone (“Kill ACNE with this simple, yet powerful tool!”). According to the FTC complaint, almost 15,000 people downloaded the apps. In the FTC settlement, the app developers were fined and were barred from making further unsubstantiated health claims.

Calgary – 07:00 MST  

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Copyright: Canadian Update

 

A few updates on copyright in Canada. The concept of “fair dealing” is the one to watch.

  • Copyright Reform: Bill C-11 (the copyright reform bill) is currently in Committee in Parliament, meaning the bill has gone throughcopyrightimage.jpg first reading, and second reading, and is being is being further examined and debated. The next stage would be third reading before it becomes law. The digital-lock provisions remain among the most contentious. The proposed law also features expansion of “fair dealing” exceptions.
  • SCC: Last December, the Supreme Court of Canada (SCC) heard 6 different copyright appeals, including an analysis of “fair dealing“. The court’s decision is expected sometime in 2012. When it is released, it will be closely scrutinized against the changes proposed in Bill C-11. (Related Article: Copyright Cage Match)
  • New Class Action: Last week, a new copyright class action suit was certified (Waldman v. Thomson Reuters Corporation, 2012 ONSC 1138), which will also tackle “fair dealing” issues. This case claims that Thomson Reuters copies court documents that have been authored by lawyers, and sells them through a searchable database. The suit alleges that Thomson Reuters infringes copyright of the authors of those court documents by reproducing them without permission.

  Calgary – 07:00 MST 

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App Developers: Get Advice on Privacy

 

The privacy problem with apps has been percolating for some time. Several high-profile reports have brought attention to this issue; Path’s embarassing privacy breach is just one of many cases where app developers have (intentionally or otherwise) harvested private details about app users by dipping into address books and location-data. App developers should take note: Get legal advice on privacy before you launch your app.

In the US, a patch-work of industry-specific privacy laws has made this a confusing area of law. In Canada, the landscape is still complex, but is underpinned by private-sector privacy laws that apply to “personal information” across all industries, at both the federal and provincial level.

This month, the California Attorney General has entered into an agreement with mobile app platform vendors – Amazon, Apple, Google, Hewlett-Packard, Microsoft and Research In Motion – to improve privacy protections for app users. This arrangement implements certain “privacy principles” and requires app developers to have a privacy policy, something that would bring app developers in line with Canadian law.  This is not new legislation, merely a loose commitment by the mobile app industry, so it cannot be enforced as law. However, it has helped shine a spotlight on this issue. 

Related Reading:

Calgary – 07:00 MST

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App Law: Copyright and Trade Secrets

 

A company approaches you to engage in a “partner” agreement – maybe a joint venture, a licensing deal, a software integration or a reseller arrangement. During negotiations, the other company reviews your technology. Negotiations breakdown when you realize that the other company has launched a competitive knock-off product that looks shockingly similar to your own beta version that you disclosed to them. Now what do you do?

According to app developer Spry Fox this is what happened in their negotiations with app developer LOLapps. LOLapps abruptly broke off negotiations and launched their own app, “Yeti Town” which has similar design elements. In its complaint Spry Fox claims that “Yeti Town is a virtual duplicate of the Triple Town game,” and the lawsuit alleges copyright infringement. Lessons for business?

  • Ensure that you have a well-drafted non-disclosure agreement (NDA) covering your negotiations. This agreement can address issues of confidentiality, and it may be appropriate to also deal with non-use, non-competition and non-solicitation issues. Not all NDAs are created equal!
  • Be aware that “ideas” alone are very difficult to protect. While copyright protection exists for the software code, the basic concept may not be protectable by copyright (see this App Law Round-Up for an example). That’s where the NDA comes in, since it imposes contractual obligations to maintain the confidentiality of trade secrets, even where there may be no copyright protection for the concepts.  
  • Exceptions that are commonly built into NDAs may provide an “out” for your competitor. In any event, even the best NDA cannot prevent a determined competitor from poaching your concept – the question then is whether the competitor’s conduct runs afoul of the law of copyright (as is alleged in the Spry Fox case), or constitutes a breach of the terms of the NDA, or both.

Related Reading: Someone Stole Your Brilliant Business Idea?

Calgary – 07:00 MST

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iBooks Author – Do You Own What You Create?

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iBooks Author is Mac app  allowing users to develop and publish multitouch digital books. If you author a digital book, you can then submit it to the iBookstore for purchase or free download, or distribute it through iTunes U, or use it with the iPad. It’s being touted as a way to bring digital publishing to the masses – for example, textbooks with embedded videos, audio and rotatable 3-D models that students can pinch and zoom.

Sounds great, but do you own what you create? Let’s have a look at the EULA (End User License Agreement v. 1.0.1).

According to the terms of the EULA (section 2(b)), you own the rights to the content that you create, and you can distribute that content any way you want, as long as it doesn’t include any files in the .ibooks format. (Making files in the .ibooks file format is the whole point of using this app.) If it does include .ibook files, then you can distribute the book by any means as long as you are giving it away for free. If you want to distribute your digital book for a fee, then it must be sold through Apple’s iBookstore, with Apple taking its customary 30% cut.

This does not mean (as some blog posts have suggested) that Apple takes any ownership of the content you have authored. You continue to own that content. The license terms mean that, by agreeing to use their software, templates and publishing tools (and in particular, the .ibooks file format), you agree to sell your iBooks book through Apple’s retail channel.

This isn’t really all that different from an author’s agreement with a traditional publisher, since a publisher will typically insist on exclusivity in handling final editing, packaging, marketing and sales of a book. They take a cut and share the royalties with the author. The author, who remains the copyright owner, is not free to then sell the book through a different distribution channel. They must sell through their publisher.
Calgary – 07:00 MST

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Alberta’s Innovation System

 

 

Join us on March 1, 2012, (see our Events page) for the upcoming meeting of the Licensing Executives Society (LES) on The Alberta Innovation System. Technology commercialization has its challenges. However, resources and funding programs are available to support technology development for small and medium sized enterprises (SMEs) in Alberta. Within Alberta, the “innovation system” has undergone reorganization over the past 2 years. In Calgary, Calgary Technologies Inc., (CTI), and University Technologies International, (UTI) have amalgamated to form Innovate Calgary. Across the province, Alberta Ingenuity, Alberta Research Council, iCORE and nanoAlberta have merged into Alberta Innovates – Technology Futures (AITF).

How does this impact licensing professionals, counsel, advisors, SMEs and entrepreneurs? What do you need to know about commercialization support within Alberta? Attend the LES Alberta Innovation System luncheon with our panel: Darren Massey Senior VP, Innovate Calgary, David Reese, Vice President, Licensing, Innovate Calgary and Scott Bass, Alberta Innovates – Technology Futures.  

Calgary 07:00 MST   

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The Frontier of IP (Part 4)

 

Simple inventions can transform our lives. Consider this: Can we use light bulbs to transmit data wirelessly?mp9003827921.JPG

On TEDTalks, an inventor shows how light from a standard LED bulb can transmit data to a mobile device, in effect acting like a wireless router. When you think about it, the invention is not that revolutionary, since WiFi transmissions use standard radio frequencies, which are simply a different set of frequencies than visible light, both of which are part of the spectrum of electromagnetic radiation. This patent  (OPTICAL FREE SPACE DATA TRANSMISSION US 2011/0069958, by the same inventor, Harald Haas) discloses the use of infrared light (another frequency along the same spectrum) for wireless data transmission in an airplane, describing an invention that would enable safe inflight wireless internet. Somebody tell Alec Balwin to invest.

The use of visible light for data transmission is not new. The first use (also claimed to be the first wireless transmission) was sent by (Canadian inventor) Alexander Graham Bell in Washington D.C. in the year 1880. His patented system was called the Photophone.

Calgary – 07:00 MST

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About SOPA…

 

What? Wikipedia is off-line? Please cue the other three horsemen of the apocalypse.

It’s amazing what happens when Wikipedia decides to blackout its service to protest “legislation that could fatally damage the free and open Internet…” Suddenly everyone is talking about SOPA (our November post is here) proposed U.S. intellectual property legislation that has raised concerns across the business world. Google, Twitter, Tumblr, Reddit, Mozilla and other internet companies are also in on the protest. That’s remarkable, mainly because these companies all have their own agendas (as any business does) and there are very few circumstances where they will coordinate their protest on a single issue on a specific day. Over to you, U.S. Congress.

Related Reading from slaw.ca: SOPA: What’s All the Fuss About? 

Calgary – 11:30 MST

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The Frontier of IP (Part 1)

 

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Today we begin a 5-part series on intellectual property that is at the edge in one way or another – either a novel technology, or a familiar “asset” that is being protected in new ways, through patent law, copyright or trade-marks. We start with gestures.

Characters in movies such as Avatar, Minority Report, Ironman and The Matrix all used hand gestures to manipulate computers. Not all that futuristic anymore, at least not for anyone who has used a Wii or Kinect to play games.

Apple and Microsoft are among the innovators who are rushing to the patent office to protect the use of hand gestures in conjunction with computer hardware devices and software to perform certain functions such as, in the case of Apple’s patent application (PDF), for real-time video processing. Microsoft’s application covers the use of hand gestures to “draw” three-dimensional objects on a computer. Before you get worried that Bill Gates can stop you from gesturing your hands in the air, there are a few points to make: these applications first have to pass through the patent office, to verify their patentability. Second, a patent would only protect an invention which uses gestures in conjunction with specific software and hardware to perform the functions covered in the patent’s claims.

If issued, these patents could provide valuable ammunition in future patent battles involving the use of gestures in conjunction with mobile devices.

Calgary – 07:00 MST

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Intellectual Property Law in 2012

 

Lawsuits! Infringement! Litigation! Ah, there’s never a dull moment in the wonderful world of intellectual property law, and 2012 will be no exception. Here’s our list of what to watch in the coming year:

Copyright, Copyright, Copyright: For several years running, we have predicted that copyright reform will come to Canada. It might actually happen in 2012. There is good reason for optimism this time: First, the Supreme Court of Canada heard a clutch of copyright cases in December 2011, and their decision is expected in the first half of 2012. Second, the Harper government is promising/threatening (depending on your point of view) to pass Bill C-11, the current iteration of the Copyright Reform Bill. Change will come, one way or another.

Online Terms & Cloud Computing: In one sense, “cloud computing” is just another name for a trend that has been developing for a decade. In another sense, it really does capture a new way of doing business for many IT services. We predict that the law will develop in this area in both Canada and the US, as online terms and cloud-computing contracts are tested in court. Here’s one example of a pending decision: Sony faces a class action in the US over its online terms for the PlayStation Network.

Anti-Spam Law: In 2011, we rashly stated that Canada made “headway” in the anti-spam department, with the passing of the Fighting Internet and Wireless Spam Act. Canada’s anti-spam legislation did receive royal assent on December 15, 2010. However, the law is still not yet in force. Draft regulations are being debated and negotiated, and even if they do come into force in 2012, they will almost certainly be subject to a grace period which will delay implementation until late 2012, or maybe even 2013.

New CDRP Rules: In 2011, CIRA updated the rules governing dot-ca domain name disputes. Watch for our review of the changes, and the first decisions that have been released under the new rules. 

Calgary – 07:00 MST

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iPhone App Trips Over Copyright

 

Copyright complaints against apps are now common, and this one frames the issues nicely: In Shanti Deva Korpi v. Apple Inc. , 1:11-cv-00906- LY (U.S. District Court) a photographer who posts her photos to Flikr, has filed a lawsuit against Apple, claiming that two iOS apps – one of which was entitled “Unofficial Guide to Hipstamatic” – engaged in a practice of scraping and republishing her photos, without authorization or attribution. According to the claim, this is a violation of copyright.

In Canada, the recent decision of the B.C. Supreme Court in Century 21 Canada Ltd. Partnership v. Rogers Communications Inc., deals directly with this issue (see my commentary Coming to terms with online copyright published in the November 25, 2011 issue of the Lawyers Weekly). The B.C. case is not an app-related dispute, but the court makes it clear that copyright will be enforceable in situations where content (including images) is scraped off the internet, and is then repackaged and republished without authorization.

Calgary – 07:00 MST

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RIM’s BBX Trade-mark Woes

 

The BlackBerry maker can’t get a break these days. On December 6th, an American company obtained a Temporary Restraining Order, from a US court barring RIM from using the mark BBX in association with software. The lawsuit is based on the registered trade-mark BBX owned by BASIS International Ltd. This has caused an embarassing renaming of RIM’s new operating system to BlackBerry 10.

Lessons for business?

  • Trade-mark screening searches are critical when launching a new brand. Searches can be conducted country-by-country, and search services can screen top markets with quick “knock-out” searches to quickly determine availability.
  • Sure, RIM has been beat up a bit by the markets recently, but it’s still a global titan in the mobile devices and software industry… but that didn’t stop a rival software maker from taking on a trade-mark fight. That’s because BASIS had registered trade-marks in its arsenal.  Without the benefit of a trade-mark registration, this fight would have been much more costly and time-consuming and the outcome would have been much different.
  • Think about timing and territory – in this case, the preliminary injunction was rushed to court because of the BlackBerry Developer’s Conference in Asia on December 7 and 8, where the BBX mark would have been used extensively by RIM. Does a US court have jurisdiction to issue an order to a Canadian company regarding the use of its mark in Singapore? You might think the answer is no, but an American judge will have a different view. Faced with the US order, RIM decided to re-brand. 

Calgary – 07:00 MST

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Copyright Week

 

For all the IP junkies out there, this is copyright week at the Supreme Court of Canada. Five copyright cases are being heard this week tackling such issues as the copyright in music contained within downloadable games, fair dealing exceptions, and streaming music online. Break out the popcorn, you can even watch the webcast!  

Calgary – 07:00 MST

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Canada’s New Anti-Spam Legislation:

 

My recent article can be found here: Canada’s New Anti-Spam Legislation: How can it impact your business?

Related Reading: Canada’s “New” Anti-Spam Law

 

Calgary – 07:00 MST

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