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UBC Theses and Dissertations

Balancing the legal teetertotter : finding the appropriate weight for creator and user rights in cyber.. 2006

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B A L A N C I N G T H E L E G A L T E E T E R T O T T E R : F I N D I N G T H E A P P R O P R I A T E W E I G H T F O R C R E A T O R A N D U S E R R I G H T S IN C Y B E R S P A C E by K E N N E T H R I C H A R D C A V A L I E R L L . B . , University of British Columbia, 2000 PhD. , Northwestern University, 1989 B . A . , University of British Columbia, 1974 A THESIS S U B M I T T E D IN P A R T I A L F U L F I L L M E N T O F T H E R E Q U I R E M E N T S F O R T H E D E G R E E OF M A S T E R OF L A W S in T H E F A C U L T Y OF G R A D U A T E S T U D I E S U N I V E R S I T Y OF B R I T I S H C O L U M B I A August 2006 © Kenneth Richard Cavalier, 2006 Abstract This study represents a "quantum analysis" Law Reform approach to the adoption and evaluation of Canadian and international legal regimes aimed at the protection of intellectual property rights (IPRs) such as copyright, patent and trade-marks in cyberspace. Related intangible property rights such as privacy, publicity, performance, exhibition, moral rights, P2P file-sharing, "grey marketing" and protection against misappropriation are therefore considered. Beginning with a review of appellate level case law to identify areas of uncertainty and new developments in contemporary IP law, especially on the Internet, the history and the philosophical justifications for granting o f traditional IPR protection of limited duration to creators are noted. The nature o f the IPRs granted and the remedies available to enforce them are presented A review of current IP practice and remedies notes the trend of the Supreme Court of Canada to strive for balance among the stakeholders, both creators and users, of the intangible property. The post-1994 TRIPS agreement and globalization are discussed and the intersection between IP law, national sovereignty, and international trade through the WTO is considered. Canada's capability to fashion its own legal response in the face of her international responsibilities and TRIPS pressure to harmonize IP law is assessed. A discussion of the merits of sui generis IP laws for use in the new digital knowledge-based economy environment rather than the extension of traditional IP laws to remove current uncertainties follows. The study concludes with a list of fifty recommendations for characteristics of any legislative solution proposed for IPR protection on the Internet. The requirement of a balanced regime is affirmed. Table of Contents Abstract '. i i Table of Contents .. i i i Preface x i i Acknowledgments xx i Dedication xxiv C H A P T E R 1 Identifying the Wobbles in Intellectual Property Rights Law: Current Cases Indicating Uncertainty in the Law 1 1.1 Introduction 1 1.1.1 Method 1 1.1.2 What are Intellectual Property Rights (IPRs)? 2 1.1.3 Incentive for Progress in the Useful Arts and Sciences 3 1.1.4 Statutory Monopolies : 3 1.1.5 Moral Rights 4 1.1.6 Recent Developments in the Protection of IPRs 4 1.2 Copyright and Patents 5 1.2.1 Types o f Interests 6 1.2.2 Theberge v. Galerie d'Art du Petit Champlain Inc 6 1.2.3 CCH v. Law Society of Upper Canada 8 1.2.4 Erosion of the Idea/Expression Dichotomy 10 1.2.5 Broadening of Definition of Expression to include Neighbouring Rights 12 1.2.6 Retrospective Extension o f Term of Copyright Protection 13 1.3 Widened Definition of "Contributing to Infringement" 14 1.3.1 "Authorizing Infringement" in Canadian Cases Compared 15 1.3.2 SOCANvCAIP 16 1.4 New Developments in Patent Law 18 1.4.1 Patent Formalities 19 1.4.2 Broadening of Definition o f "Invention": Business Methods, L iv ing Organisms (Higher and Lower Life Forms), and the Doctrine of Equivalents 20 1.4.3 Harvard Mouse Case in Canada (a Different Approach) 21 1.4.4 Erosion of Compulsory Licensing Provisions in Canada 25 1.5 New Developments in Trade-mark Law 28 1.5.1 U .S . Famous Marks Legislation (Protection from Cybersquatting) 30 1.5.2 Canadian Responses 32 1.5.3 Preserving the Value of Goodwil l through "Dilut ion" Prevention 34 1.5.4 Erosion of Distinction between Trade Dress and Function 37 1.6 "Sui Generis" Evergreen Provisions and the Diminishing Public Domain 38 1.7 Evidence of Strengthened "Creator Rights" Among Traditional IPRs 39 1.7.1 Increased Duration of Copyright Outside of Canada 39 1.7.2 Posthumous IP Rights and Bequeathing 39 1.7.3 Extensions of Copyright to include Adaptations or "Derivative Works" 40 1.7.4 Adoption o f Neighbouring Rights 42 1.7.5 Inalienable Moral Rights of Creators 43 1.7.6 Droits de suite 43 1.7.7 Re Droits de Destination 44 1.8 Strengthened "Creator Rights" in Traditional IPR Protection 46 1.8.1 The Function and Purpose of Intellectual Property Rights 46 1.8.2 The Intersection of IPRs with the Free Flow of Information 47 1.8.3 Ramifications of Strengthened IPRs for Creators at the Expense of User Rights 48 1.9 User Rights and a Protected Public Domain 49 1.10 Problem: Identify the Appropriate IPR Protection Regime for the Internet Responding to Needs of A l l the Stakeholders in Cyberspace 52 1.10.1 Stakeholders 53 1.10.2 Authors, Inventors, and Creators 54 1.10.3 Public Domain 54 1.10.4 Bureaucrats and Judiciary 55 1.11 Are the Traditional IPRs Appropriate in the new Cyber Age? 57 1.12 Who Owns Copyright in the Digitalized Version? 58 1.13 Possible Misuses of New Legal Regimes as a Tool of the Real Politik 60 1.14 Rights Holder Hyperbole 62 1.15 Network Externalities 64 1.16 Upheld Limits of IPRs Feist (U.S.) and Tele-Direct (Canada) 66 C H A P T E R 2 His tory and Philosophical Justifications of Tradi t iona l IPRs 67 2.1 Patents, Copyrights and Trademarks and Their Original Use 67 2.1.1 A Br ie f History of Copyright Law 67 2.1.2 Copyright as a Tool of Censorship 70 2.1.3 Extension of Copyright as a Tool of Censorship 72 2.1.4 Parody and Unfavourable Fair Comment 74 2.1.5 Requirement for Grant of Copyright I: "Sweat of the Brow" 76 2.1.6 Requirement for Grant of Copyright II: "Modicum of Creative Act iv i ty" 79 iv 2.2 Trade-mark Law as a Tool of Censorship 82 2.2.1 The Madrid Protocol and International Trade-marks 83 2.2.2 Extension of Trade-mark Law as a Tool of Censorship 88 2.2.3 Defence of Goodwil l . . . 90 2.2.4 Lego v. Megabloks and the Doctrine of Functionality 92 2.3 Patent, Copyright, Trade-mark Laws as Statutory Monopolies..... 97 2.4 Ramifications of Strengthened Traditional IPRs for Creators 99 2.5 Intersection of Traditional IPRs with the Free Flow of Information 100 2.6 Philosophical Justifications for Traditional IPRs 101 2.6.1 Utilitarian Social Bargain Incentive 101 2.6.2 Characteristic of Time Limited Legal Economic Rights 101 2.6.3 Natural Rights and John Locke 103 2.6.4 Locke's Privileging of Labour 104 2.6.5 Locke's Limits to the Reach of Labour 106 2.6.6 Locke's Proviso ..: 106 2.6.7 Locke's Applicability to Intellectual Property 107 2.6.8 Public Good vs. IPRs 108 2.7 Natural Justice and Authors' Rights 113 2.7.1 Justifications for IPRs II: Personality Rights and Hegel 113 2.7.2 Kant's Theory of "Persona" 115 2.7.3 Inalienable Personal Rights included in the IPR Bundle 117 2.7.4 Equitable Right of "Paternity" over the Work 118 2.7.5 Association with Romantic Era Notion of the Genius of the Artist 120 2.7.6 Inali enable P ersonal Rights 121 2.8 The Question of Time Limited or Unlimited Copyright 121 2.9 Injunctiveand Prospective Relief for Equitable Rights 122 2.9.1 Restitution and Retrospective Damages Rel ief for Legal Rights 123 2.9.2 Bundle of Rights Theory 123 2.9.3 Legal/Economic Rights: Exclusive Ownership 124 2.9.4 Strict Liabili ty for Infringement 124 2.9.5 Alienbil i ty to Enable Economic Exploitation 125 2.9.6 Restitution through Damages 125 2.10 Equitable Rights. 127 2.10.1 Moral Rights of Attribution and Integrity of the Work 127 2.10.2 Moral Rights of Anonymity 127 2.10.3 U .S . Tort of "Unfair Taking" or "Misappropriation" 128 2.11 Nature of Rights: Exclusive Individual vs. Collective 129 2.12 Role of the Author or Artist 131 2.13 Art "Objects" versus Art "Works" 135 2.14 Rivalrous vs. Non-rivalrous Ownership 136 2.15 Value from Rarity vs. Network Externalities 138 CHAPTER 3 Characteristics of Existing Traditional IPR Protection Regimes 140 3.1 Introduction 140 3.2 Necessary Formalities for Traditional IPRs 140 3.3 Registration for Patents 141 3.3.1 Timing o f Patent Applications: First to Register versus First to Invent 143 3.3.2 International Patent Treaty and Jurisdiction of the Patent Office 143 3.3.3 Ful l Disclosure of Best Method ;....144 3.3.4 Improvement Patents 145 3.3.5 Patentability/Non-patentability of Inventions 146 3.3.6 Illegal Inventions 149 3.3.7 Maintenance o f Fees and Registration 150 3.4 Registration for Trade-marks 151 3.4.1 Contesting "Use" in a Jurisdiction 151 3.4.2 Confusion with Already Existing Marks ....153 3.4.3 Disclaiming Elements of the Mark 153 3.4.4 Disallowed or Ineligible Marks 154 3.4.5 Genericide 154 3.4.6 Expunging Registration for Non-payment o f Fees 157 3.5 Registration for Copyright .158 3.5.1 Blue Crest Music and the Nature of Copyright : 158 3.5.2 Formalities : 159 3.5.3 Fixation 160 3.5.4 Theberge and Fixation 161 3.6 Distinction from Industrial Design 162 3.7 Patent Duration : ...163 3.8 Copyright Duration 164 3.8.1 TalfourdAct 1842 164 3.8.2 "Dickens " Provision 165 3.8.3 Single Term Posthumous Rights 166 vi 3.8.4 Reversionary Copyright 169 3.9 Trade-marks Duration 174 3.10 Cease and Desist Letters 175 3.11 Digital Rights Management and Other A R M Systems 176 3.11.1 "Tech Fixes" .'. 177 3.11.2 Privacy Concerns 178 3.12 Cross-licensing Agreements 179 3.12.1 Licensing 179 3.12.2 Requiring the Licensee to Defend the Marks 181 3.13 Proving Infringement 182 3.14 Patent Causes of Action 182 3.15 Trade-mark Causes o f Action 183 3.15.1 "Passing o f f 183 3.15.2 Confusion : 184 3.15.3 False Light Endorsement 184 3.15.4 Tarnishment -185 3.15.5 Trade Guise 188 3.15.6 Unregistered Marks 189 3.15.7 Grey Marketing and Piracy 190 3.16 Copyright : 191 . 3.16.1 Access and Substantial Similarity 191 3.16.2 Derivative Work 191 3.16.3 Plagiarism 192 3.16.4 "Contributing to Infringement" compared with "Authorizing Infringement".... 192 3.16.5 "Unconscious Copying" •. < 193 3.16.6 Piracy 195 3.16.7 Downloading. : -196 3.16.8 Doctrine of First Sale in the U.S . 198 3.17 Remedies 200 3.17.1 Damages 202 3.17.2 Forfeiture and Seizure of Infringing Copies 203 3.18 Changing the Registers 204 3.19 Interlocutory Prescriptive Injunctive Relief Anton Piller Orders 204 3.19.1 Cease and Desist Orders 205 3.19.2 Fines for Contempt of Court and Punitive Fines 206 3.20 Compulsory Licensing 206 3.21 Defences 206 3.21.1 Patent Infringement Defences 207 3.22 Registration Opposition 207 3.22.1 Trade-mark Infringement Defences 208 3.22.2 Grounds for Striking a Mark from the Trade-Marks Register 208 3.23 Copyright 209 3.23.1 Fair Dealing in Canada and Fair Use in the U.S 209 3.23.2 Lack of Creativity (TeleDirect in Canada and Feist in the U.S.) 210 3.23.3 Idea/Expression Dichotomy 211 3.23.4 Lack of Fixation 212 3.23.5 Translations and Digital Translations 212 3.23.6 The Problem of "Thin Copyright" 214 3.23.7 Digital Translations , 215 CHAPTER 4 Canada's International Obligations to Protect IPR: Treaties and Agreements 217 4.1 Introduction 217 4.2 Pirate Nations 220 4.2.1 Historical Connection of IPR Protection with International Trade 223 4.3 IPRs as Granted Monopolies and the Abuse of Dominant Position 224 4.3.1 Competition Act, s.32 225 4.3.2 The Competition Bureau .....227 4.4 International Treaties under which Canada has Obligations 228 4.4.1 TRIPS, WIPO and the WTO 229 4.4.2 WIPO, TRIPS and International Harmonization 230 4.5 The Road to TRIPS: Bilateral and Multinational IPR Agreements 232 4.5.1 British Imperial and Commonwealth Law 233 4.5.2 Statute of Monopolies (1623) English Patent Law 234 4.5.3 U.K. Imperial Copyright Statute of 1911 235 4.5.4 NAFTA 236 4.5.5 E U Directives 239 4.5.6 European Database Directive concerning Privacy Protection 240 4.5.7 U .S . Safe Harbor Compromise 241 4.6 International Conventions 243 4.6.1 Madrid Protocol for International Trade-mark 243 4.7 Berne Convention on Copyright 244 4.7.1 Berne Convention Berlin (1908) 245 4.7.2 Berne Convention Rome (1928) 246 4.8 Moral Rights in Canada and the U . S . ....247 4.8.1 U . S . Visual Artists Rights Act ( V A R A ) 248 4.8.2 Canada's Status of the Artist Act 250 4.9 Berne Convention Paris (1971): Min imum Standards for TRIPS 250 4.10 Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations 251 4.11 Paris Convention for the Protection of Industrial Property 252 4.12 Integrated Circuit Topography Act 253 4.13 Universal Copyright Convention (UCC) 1952 253 4.14 International Union for the Protection of New Varieties of Plants 254 4.15 W I P O Administered Treaties 256 4.15.1 WIPO Copyright Treaty... 256 4.15.2 WIPO Performances and Phonograms Treaty (WPPT) 258 4.16 International Patent Treaties 262 4.16.1 Patent Cooperation Treaty 262 4.16.2 Budapest Treaty 263 4.17 National Treatment Requirements 264 4.17.1 National Treatment in TRIPS 264 4.17.2 Most Favoured Trading Nation Status Under WTO 266 4.17.3 TRIPS and WIPO 266 4.17.4 The use of the WTO to enforce IP rights for Foreign Nationals 268 4.17.5 The New Imperialism 269 4.17.6 U.S . Digital Millennium Copyright Act (DMCA 1998) 270 4.17.7 Trade Sanctions and U.S . "Special 301" Designations 272 4.17.8 Non-Tariff Barriers to Trade 273 4.18 WTO and WTO Trade Dispute Panels 274 4.19 International Treaties and Canadian Obligations 275 4.20 Canadian Sovereignty Versus WTO Free Trade in Cultural Industries 277 ix 4.21 Canada as a Trading Nation ; 277 4.22 Other Costs of Going It Alone Internationally 278 4.23 Benefits of a Canadian Way 280 4.24 Is Globalization Dead, or "Merely Resting?" 280 C H A P T E R 5 Stretching Old Laws for Contemporary IPR Protection or Creating New Laws for the Digital Era? Stilling the Wobbles: Conclusions and Recommendations 282 5.1 Summary of Chapters 1 -4 282 5.1.1 Chapter 1 282 5.1.2 Chapter 2 283 5.1.3 Chapter 3 285 5.1.4 Chapter 4 287 5.1.5 The Myth of Harmonization: Existing Unique National IPR Laws 289 5.2 Canadian Patents 290 5.2.1 Harvard Mouse 290 5.2.2 The Monsanto Decision 291 5.3 Canadian Trade-marks 293 5.3.1 Parallel Importing : 293 5.3.2 Smith & Nephew and Coca-Cola v. Pardhan 295 5.3.3 Canada's Failure to Implement the Madrid Protocol 297 5.4 Canadian Copyright 298 5.4.1 Reversionary Rights and the Heirs of Lucy Maud Montgomery Decision 299 5.4.2 Non-alienable but Waivable Moral Rights 299 5.4.3 The BMG and the SOCAN v. CAIP Decisions and ISP Liabili ty 299 5.4.4 Authorizing Infringement, the C C H Decision 300 5.4.5 Failure to Pass B i l l C-60 Copyright "Reform" 301 5.5 New Canadian Sui Generis IPR Protection Regimes 301 5.5.1 Sui Generis Protection for Databases and Cyberspace 301 5.5.2 Integrated Circuit Topography Act ( ICTA) 302 5.5.3 PBRA 303 5.6 United States' Experience with Unique IPR Protection Laws 304 5.6.1 Tort of Misappropriation: the INS Decision 305 5.6.2 FTADAct .' ....307 5.6.3 "Sweat of the Brow" and the Feist Decision 308 5.6.4 U . S . Rejection o f 6bis Berne Convention 310 5.6.5 Retrospective Copyright Term Extension and the Eldred v. Ashcroft Decision..310 5.6.6 Digital Millennium Copyright Act 312 5.6.7 "Doctrine of First Sale" and the Napster/Grokster Decisions 312 5.6.8 Safe Harbor, The Patriot Act and Privacy Protection 313 5.6.9 Special "301" Responses 314 5.7 European Database Directive 314 5.7.1 Time-limits and the Evergreen Provision 315 5.8 Sui Generis or Traditional IP Law? 315 5.8.1 "New" Multilateral International IPR Protection Recognition 316 5.8.2 The Berne Convention before U . S . Ratification in 1989 316 5.8.3 The Universal Copyright Convention before TRIPS 317 5.9 Concerns about National Sovereignty and Globalization 317 5.9.1 National Treatment versus Citizen Protection 318 5.9.2 Phil Collins v. Imtratt Copyright Case 318 5.9.3 National Cultural Policy versus W T O Policies 319 5.9.4 Canadian Split-Run Magazine Case 320 5.9.5 Concerns about Non-Tariff Barriers to Trade against Third Wor ld Economies .320 5.9.6 Concerns about Increased Costs for Countries Importing IP 321 5.9.7 A I D S / H I V Epidemic in Africa versus the Pharmaceutical Rights Holders 321 5.9.8 Australia KaZaa Decision Contrasted with C C H 322 5.9.9 "Sui Generis " IPR for Cyberspace 323 5.10 Conclusions 326 5.10.1 50 Selected Recommendations for Future IPR Protection Regimes in Canada ..326 5.11 The Inequity of Perpetual Copyright 337 5.12 Achieving the Balance: Characteristics of Balanced IPR Protection Regimes ..339 6.0 Selected Bibl iography 343 6.1 Selected Cases •• 343 6.2 Selected Statutes 352 6.2.1 Canada 352 6.2.2 U . K 353 6.2.3 U.S 354 6.2.4 Australia 355 6.2.5 Europe 355 6.3 International Treaty Agreements 356 6.4 Secondary Sources 356 6.5 Other Sources 367 xi Preface This study began to take shape many years ago while I was an art historian/archaeologist. In preparing my research for publication I was confronted with the need to pay for copies of copyrighted photographs of archaeological works that had long been in public domain. If I could take my own photo, there was no copyright issue, but i f the institution did not allow visitors access to their collections for the purpose of photographing the objects, the only photos available would be those taken by the museum or gallery staff photographers. The copyright for these reproductions of ancient art objects would invariably be owned by the institution. The cost for permissions to publish such photos became more and more expensive while access to the works in the collections to take one's own photos became less and less common. When I later became a Gallery Director, I came to understand that in tight economic times the revenue gained from insisting on the use of only the institution's photos represented a revenue stream that would continue to grow in importance. O f course, the official justification for restricting photography of the collection could be for conservation purposes and, to be fair, in some cases this was legitimate. Conservators all know that extensive or intense light exposure can and does damage art. Yet the use of copyright to extract ever-higher fees from scholars unpaid for their writings in the Humanities seemed and seems to me to be a misuse of the copyright regime. I set out to try to understand copyright law. I came to understand that i f I took my own photographs I owned my own copyright. I learned that under "fair use" provisions in U .S . law (and to a lesser degree under "fair dealing" provisions in Canadian law), a scholar could claim an exemption for copyright infringement i f the infringing copies were to allow for the study and criticism of the copyrighted work. But as a professor o f art history, I also learned that the use of photographic representations of art objects (whether they were copyrighted or not) did not escape infringement liability unless the use of the visual images in the lecture was intended to teach the audience about the quality of the reproduction, not illustrate the art work under discussion. While the art work could be in the Public Domain, the photograph of the work was not. A s many faculty at universities and colleges found out to their chagrin in the 1990s, the "thin" copyright in the photograph owned by the photographer (or the institution i f the photograph was commissioned by them or done by the photographer as an employee of the institution) was sufficient to create a need to pay royalties or license fees. Wi th the advent of the Internet after the mid 1980s, the question of rights to use reproductions and digital imagery became all the more acute. I became very aware of the restriction of access to intellectual property afforded by IP law. Given my experience with diminished access to reproductions of art in the Public Domain afforded by the granting of new protection under copyright or trade-mark I became concerned about the potential for rights holders (often no longer the authors or inventors who had sold their rights early in their careers before the true worth of their creations could be known) who could restrict access to the expressions. I noted with some alarm that almost all knowledge was being translated into a digital format that could be "read" only with the aid of computers and that the translators and computer manufacturers were in a position to become the new gatekeepers of the sum of human knowledge. Wi th descriptions of the new knowledge-based economy to come I realized that this control of access to knowledge was, perhaps, the single most pressing issue facing society today. With the controversy in music that arose from "sampling" in contemporary music I became aware of the difficulties that IP law could present for artistic inspiration. From the perspective of an art historian I knew that "progress" in the fine arts had often involved derivative works that owed much to art objects that had come before. Manet's famous Le Dejeuner sur I 'herbe exhibited in the Salon des Refuses of 1863 was derived from a group of classical deities from an engraving by Marcantonio Raimondi (The Judgment of'Paris, c. 1520) done after a design supplied to him by Raphael. Raphael -was, in turn, inspired by ancient Roman reliefs such as the River Gods detail from the 3 r d Century A . D . now in the V i l l a de Medic i . The entire history of art academies was replete with art students using the process of "copying the great masters" to develop their skills as an artist. How would new artists be taught i f copying was precluded by IP law? Similarly such laws could and have been used to censor artistic expression on the basis of the exclusive right of the original artist or copyright holder. Parodies of famous works of art made no sense unless the parody could evoke the original art objects. I realized that rather than encouraging progress in the arts, IP laws delayed or restricted artists from progressing. I had written a dissertation in Art History drawing a distinction between the art object, an expression created by the artist, artisan, architect, builder, author or performer and the art work created between the audience (usually but not always including the maker of the art object) and the art object. I had learned in my study of aesthetic theory that the aesthetic relationship created between the audience and the art object beheld could be entirely different from what was intended by the maker. xiv A s an archaeologist I found myself studying many objects where we had absolutely no idea who the maker was and what his or her intention had been in creating the object. While we often wished we knew, it was obvious that that knowledge was not critical for an aesthetic relationship to be formed between subsequent audiences and the object. In many instances we had no idea what the original function of an artifact might have been,. We often identified these items as cult objects of "religious significance" until subsequent study clarified the picture (when it did!). B y studying art works over time I realized that as the audience changed, the art worked in an aesthetically different manner. I came to realize that the aesthetic life of an art object could and usually did transcend its origins as an art object. A Victory Stele ofNaram Sin from 2300-2200 B . C . had originally been intended to tell viewers about the powerful Akkadian king who claimed to be the K i n g of the Four Quarters (the Universe). It was transformed into war booty by the Kings of Ur , the eventual destroyers of the Akkadian culture, and taken as a prize of war to Susa as proof of their superiority over the Akkadians. How much richer and fuller the life of the art work could be than that of the original art object. Further studies of art historiography and modern and contemporary art illustrated for me that the changing of the audience and or context of any object, or any expression, could give it an entirely new meaning. Michelangelo and countless earlier artists depicting Moses (1513-15) would put "horns" on the Old Testament figure's head because of a misapprehension of the translation of the description of Moses with horns coming from his forehead after he received the Commandments. A better translation of the original biblical expression would have described two "rays" emanating from his head, rather than two horns. XV Whole movements in western art such as the Neo-classical movement could be based upon totally erroneous impressions of the art of the past. (Eighteenth and nineteenth century Neo-classical sculptors avoided the polychromy o f ancient classical Greek statuary assuming the sun-bleached examples they knew were examples of a "more pure" aesthetic that celebrated unpainted white marble.) Whole cultures could be interpreted in archaeological reconstructions to fit the hopes and aims of the modern excavators of their ruins. So the Minoan culture of Crete discovered by Arthur Evans against the backdrop of the terrible conflicts of the first and Second Wor ld Wars was contrasted as "peace-loving" when compared to the "warlike" Mycenaean culture of the Greek mainland. Evidence of Mycenaean occupation of Knossos following the contraction of the Minoan culture led to a scholarly controversy whether the Minoans inspired the Mycenaeans or the Mycenaeans were responsible for the destruction of Minoan culture. More recent excavations have revealed a less idyll ic Minoan culture than envisioned by Evans, and that the Mycenaeans may have merely occupied the power void left after the demise of the Minoan culture. The point is that as a modern audience we make of the art objects and artifacts what we w i l l in a new perceptual or aesthetic relationship. However, we need not rely only on ancient civilizations and the passage of time to erase or erode the artist's central role in the production of art works. The Modern Art Movement has also demonstrated the importance of audience reception studies in aesthetics. After the Salon des Refuses in 1863, we saw the development of new ideas in the arts that stressed the importance of abstraction and diminished the importance of both artistic subject matter and the role of the artist in the production of modern art. XVI Urinals could be signed with a pseudonym (R. Mutt), re-titled as The Fountain and placed on display as fine art by Marcel Duchamp in 1917. Other "found objects" such as a reproduction o f Leonardo's Mona Lisa, defaced with a mustache and goatee and re-titled L . H . O . O . Q . (French pun for "she has a hot ass") could be made into examples of fine art by Duchamp and other modern artists simply by changing the context of the original object. Bicycle seats and handlebars could be reshaped into the form of a Bull's Head in 1943 by the Spanish artist Picasso. Marcel Duchamp would create his first Bicycle Wheel sculpture in 1913 by putting the wheel and front forks upside down on a painted wooden stool. He would exhibit a snow shovel in 1915 called In Advance of the Broken Arm. M a n Ray would create his sculpture Gift by attaching a number of tacks to the bottom of a laundry iron in 1921. New aesthetic possibilities were created by the artists by altering the perceptual context of the audiences. There were bicycle manufacturers who created the original "found objects" used by Picasso and Duchamp to create their works, ceramicists who created the original urinal that became Duchamp's Fountain in 1917, bottle rack manufacturers who created the raw material for his 1917 Bottle Rack and even some photographer who reproduced Leonardo's Mona Lisa for a poster at the Louvre, who were all the original creators of the art objects we have just discussed. Without them the objects would not have been made. However, it was the subsequent aesthetic use of their manufactured objects that "created" the art works that are so famous today. The maker of the object, necessary for its generation, disappears behind subsequent creators to arrive at a creative expression. When we consider artist Judy Chicago's Dinner Party done between 1974-79, we encounter a work executed by many volunteers, but credited only to artist Judy Chicago. Similarly in the xvii past great artists such as Rubens established ateliers where apprentices, artisans and assistants may have been the actual makers of objects, but the credit for the art work is usually given to the Master. Reconciling the atelier system with IP law is difficult unless all such work is determined to be done in the course of employment or by commission in the atelier. The question of who should own the IP rights, especially in a collective ownership situation becomes complicated. It occurred to me that i f we regard the granting of a limited term monopoly to the artist as payment for their contribution and the Public Domain as the ultimate employer or "Master of the Atelier", we are forced to consider the copyrighted work as the intellectual property of the Public Domain. In addition, i f we consider the role of the audience or subsequent audiences in the creation of the art work, we must privilege those audiences as at least equal to (and possibly exceeding) the maker of the object in terms in deserving credit for the creation of the art work. It was at this point that I met Professor Bob Paterson and discovered that issues such as this, among others, were being discussed in the law. I decided to enter Law School and embark on a career as a lawyer. I was inspired by Professor Bob Howell 's summer programme in IP Law at Uvic , and further study with Professor Joe Weiler underlined the importance of IP law for Entertainment and Sports Law as well as Cyber Law. After finishing my L L . B in two years I entered the L L . M programme at U . B . C . where I continued my research and study of the component elements of IP law, i.e. copyright, patent, trade-mark, torts, trade secrets, competition, media and regulatory law. A l l o f these studies added to my understanding of the problem as one that needed a sort of "quantum analysis" of all these component legal sub areas rather than the narrowly defined scholarly analysis of any single element. This study would not be just another on the minutiae of copyright or patent law. It would attempt to explain the need for balance among all the laws intended to protect the rights to the use and enjoyment of intangible property. It would attempt to avoid the problem of piecemeal legal reform (at the expense of what I advance as an existing system of IPR protection) wrought by response to individual situations and legislative developments in the component constituents. The study would try to explain why the limitations o f traditional patent, copyright and trade-marks law need to be understood before developing any new regime. The impact of the arrival of the TRIPs, the rise of mass media and the Internet, the development of the "knowledge-based economy" and the recognition of the rise of the importance of categories of non-rivalrous ownership and the effect of network externalities on the value of such properties were just four of the factors complicating the use of traditional IPR protection regimes and creating an imperative for the development of new legislation in the protection of IPRs at this time. Obviously this would mean a very ambitious and lengthy thesis, but it was clear to me that an overview with an appreciation of the entire system of intellectual property law was required. Art ic l ing with entertainment lawyer, M r . Arthur Evrensel, at Heenan Blaikie L L P and then clerking for Madam Justice Karen Sharlow at the Federal Court of Appeal in Ottawa strengthened my resolve to address this topic in this thesis. In addition teaching IP law with Professor Joe Weiler in his Entertainment Law, Cyber Law, Sports Law and Law of the Olympics course gave me time to allow the thesis " . . .to grow in the telling" far beyond the normal L L . M thesis length and scope. This thesis is the result o f xix this history and frequent reference in the press to issues germane to it is proof of its current relevance. Acknowledgements N o thesis or dissertation is ever written without the support and help of many people. This thesis is no exception to that rule. I owe much to many of the faculty in the Faculty o f Law at both U B C and U V i c (where I studied in Professor Bob Howell ' s summer program in Intellectual Property Law during the summer of 1999). If it had not been for the inspiration and encouragement of many people at U B C I should never have been able to produce this opus for a L L . M . thesis. These include: Professor Bob Paterson at U B C with whom I studied Cultural Property Law and audited Corps I; without his encouragement I might not have taken up the study of law in the first place. Were it not for the understanding and generosity of the Faculty of Law at U B C granting me a year's leave from my studies during my annis horribilis of 2004/5 when my mother died while I awaited hip surgery, I doubt that this project could have come to fruition. Similarly necessary in the completion of this thesis was the encouragement of my fellow students; my principle, M r . Arthur Evrensel of Heenan Blaikie L L P Vancouver; "my" justice Madam Justice Karen Sharlow, who supervised my clerkship at the Federal Court of Appeal in Ottawa; Professor Joel Bakan who ran the Graduate Seminar in my year; Professor Bob Dieboldt, who let me audit. Secured Transactions and for whose 1 s t year Contracts Class I was a teaching assistant in my first year of Graduate Studies; Professor Steve Wexler, who encouraged a curiosity about all aspects of law, ancient and philosophical and let me audit Succession with him; Professor Wes Pue, who encouraged me to present my research at scholarly conferences; Professor L i z Edinger, who let me audit Conflicts of Laws with her; Professor Kei th Farquar, who let me audit Trusts with him; Professor Robin Elliot who taught me Charter, Professor Ian Townsend-Gault, who introduced me to International Law; and Professor Jon Festinger, who was my colleague xxi teaching Entertainment and Sportslaw, and who involved me in the first ever offering of a course on the Law of Videogaming taught at both U B C and U V i c by teleconferencing. However, the three people without whose support, encouragement and editorial help I could not have written this are: my industrious second reader Professor Tony Sheppard, whose many discussions about the laws of Equity and Equitable Remedies spurred a real interest in that area; my advisor Professor Joe Weiler; and my wife, Sharon Cavalier. They were the only three people who have been subjected to reading all o f this study in its earliest drafts. Academically I owe the most to my two readers, Tony Sheppard and Joe Weiler. Professor Sheppard's sharp eyes alerted me to many of the inevitable typos, format problems, split infinitives, and sentence fragments of a first draft. The thesis is much stronger for his input. However, it was Professor Weiler who took me under his wing and became my academic mentor after I studied the law of cyber space, entertainment law, sports law and the law of labour policy with him. He gave me the opportunity to participate in the offering of these courses in subsequent years and he invited me to participate in the development and offering of the first ever course on the Law o f the Olympics. He gave me lots of leeway to create this thesis in a form that I hope can be exploited as a book. He encouraged my research and thinking in a manner exemplary to other graduate thesis supervisors. He tried to find me experiences, helping me secure an articling student position at Heenan Blaikie with Arthur Evrensel, and taking me on as a colleague teaching Cyber, Entertainment and Sports Law at U B C , that would strengthen my expertise in this area. His gentle but firm hand has guided me to the completion of this thesis. xxii The third person to whom I owe the most personally is my wife, Sharon Cavalier. She has been remarkable in her unwavering support for my completion of this degree. It may not be uncommon for the wives of graduate students to help in the preparation of a Ph.D dissertation or a Master's thesis, but to do both in two separate disciplines really goes beyond the call o f duty. M y wife has seen me through my even lengthier Ph.D dissertation and now, my L L . M thesis that "grew in the telling". She has proof read drafts, listened to my ramblings, critiqued and improved my expression, endured the "hell of uncertainty" that is the student's lot, and waited patiently for me to "finish school" someday. To her I owe the most love and gratitude and to her I am most thankful. A l l of the people I have mentioned above contributed to the strength of this study with their support and inspiration, but the flaws that are inherent in the thesis are strictly my own. xxiii Dedication This thesis is dedicated to my mother, Minnie Josephine Cavalier, who passed away during its composition. A good woman of uncommon strength, she successfully steered me away from the worst of her vices and failings while setting an impossibly high standard with her virtues and character for me to emulate. A woman with little formal education, without whose support and encouragement I should never have embarked on my ongoing voyage of discovery, she is sorely missed. This one is for you mom! xxiv Chapter 1 Identifying the Wobbles in Intellectual Property Rights Law: Current Cases Indicating Uncertainty in the Law 1.1 Introduction This thesis primarily represents a Law Reform approach to the adoption and evaluation of Canadian and international legal regimes aimed at the protection of intellectual property rights in cyberspace. Chapter 1 begins with an analysis of recent developments in the realm of Intellectual Property (IP) Law and evidence for new concerns in that area. It is intended that the concerns raised w i l l help identify necessary characteristics of the optimal regulatory regime for the protection of intellectual property rights in cyberspace. After identifying these current concerns it w i l l be necessary to discuss the philosophical justification for intellectual property law in Chapter 2 . Chapter 3 examines the history of currently existing intellectual property regimes. Chapter 4 considers new international developments in the regulation of relationships in cyberspace. A n d finally, Chapter 5 offers a discussion of the future of intellectual property in cyberspace based upon the conclusions drawn from the earlier chapters. I w i l l argue that any future regulatory regime w i l l have to balance carefully the legal and social interests of all parties involved, both creators and users. 1.1.1 Method This first chapter of the thesis involves examining recent appellate level cases to identify those areas of intellectual property law that demand clarification. Looking at the recent commentary by the members of the Supreme Court in Canada about the function and purpose of the provisions of the acts protecting intellectual property we can identify some of the necessary characteristics of any proposed intellectual property regime. B y studying the recent cases we can determine how new circumstances are straining existing traditional law surrounding intellectual property. Current legal regimes of intellectual property protection must be examined from a doctrinal position to determine ambiguities in the law arising in cyberspace. This is a necessary prerequisite to determining whether the current regime is appropriate in the new environment of cyberspace and the "new information economy". We begin with a reexamination of the rationale for the protection of intellectual property rights from a Law and Society point of view. It w i l l also be necessary to determine which public and legal policy issues are at stake and to predict the form future Canadian laws should take regarding the protection of intellectual property rights. A s well , Canadian international treaty responsibilities w i l l need examination with regards to intellectual property protection from both a post-colonial and a postmodern perspective. This is necessitated both by a need to understand just what legal and political capacity Canada has to construct a legal regime of its own and in order to contextualize Canada's role in the geopolitik o f the new information economy. In addition, the introductory chapter w i l l demonstrate the crucial distinctions between tangible and intangible property rights and it attempts to cool the rhetoric and thereby escape from the hyperbole of the adversarial language most often used by advocates to describe intellectual property disputes today. The use of loose terminology such as "piracy" and "theft" elevates elements of disputes beyond a contest of competing rights to one of moral wrong marked by compulsion and deprivation of the rights owner. 1.1.2 W h a t are Intellectual Property Rights (IPRs)? Let us begin by discussing the definition of Intellectual Property Rights (IPRs). 2 Traditionally IPRs are legal rights of exclusive ownership surrounding the production of intangible property such as copyright for original fixed expressions, patent for fully disclosed new inventions and trademark for the use of marks or labels enabling consumers to know the origin and likely quality of goods and services offered for purchase. 1.1.3 Incentive for Progress in the Useful Arts and Sciences These legal rights are intended to serve as incentives for creation. They must be alienable to allow economic exploitation by the owner. It is the profit from economic exploitation that produces an incentive for the creation of new and useful works. Normally, the exclusive ability to exploit invention, expression or use of the author/artist's creation enhances the value o f profits that can be realized. That exclusive right leads to greater incentives for the creation of more such inventions, expressions or use of the intellectual property. The incentive is seen to further the progress of society in the development of new and useful arts and sciences. 1.1.4 Statutory Monopolies The granting of statutory monopoly to the owner o f intangible property has traditionally been an indication that society acknowledges these rights. These legal rights in the law can be enforced by remedies made available to the owner by operation of statute, during the period of protection granted against would-be infringers of those exclusive rights. So traditionally IPRs are most often recognized as exclusive rights to exploit economically the fruits of one's invention by means of a time-limited statutory monopoly. In Canada, for patents, this is usually a 20-year period of protection (Canadian Patent Act s. 44) with the payment of annual fees; for copyright a minimum of 3 life of the author plus the end of the calendar year and an additional 50 years (Canadian Copyright Act s. 6) in the case of authored works; and for trade-marks usually 15 years per renewable term (Canadian Trade-Marks Act s. 46) provided the goods or services remain in use. O f course there are variations in the term of protection for commissioned works, for jointly authored works, and for unpublished works, but the statutory monopolies granted are not perpetual. However, these are not the only IPR granted to authors, artists or inventors. 1.1.5 Moral Rights . Often associated with these rights of exclusive ownership are personal rights of association or non-association of the author, artist, inventor, or goods and services provider with the examples of their creation in fixed form. These are sometimes referred to as the moral rights of the creator. These involve the right to be credited with invention of the intangible property or the right to remain anonymous; the right to demand maintenance of the integrity of the work, and the right to prohibit or disassociate from alterations of the work that could harm the creator's reputation. It is this right to prohibit the use of intangible property that enables IPRs to be categorized as potential tools of censorship. 1.1.6 Recent Developments in the Protection of IPRs Having defined IPRs, it is necessary to look at recent developments in the protection of IPRs. A s we shall see, the ratification of the Berne Convention by the U . S . in 1989 has led to several international developments in the protection of IPRs world- wide. The establishment of the World Intellectual Property Organization (WIPO) and the adoption of the minimum standards of the multilateral Agreement on Trade-Related 4 Aspects of Intellectual Property Rights, Including Trade in Counterfeit Goods (TRIPS) agreement in 1994 have led to several modifications in the traditional intellectual property law of many countries as they attempted to harmonize with international standards. Much of this process has been called "globalization". Globalization of intellectual property law will be more fully examined in Chapter 4, but for the moment suffice it to say that globalization has caused many nations to reexamine their IPR protection regimes over the past decade or so. In addition, the ubiquitous Internet, and the use of computers and digitalized data have elevated the need to consider what future IPR protection regimes will look like. Let us begin with an examination of recent developments in the traditional intellectual property protection regimes. 1.2 Copyright and Patents Of the traditional IPR regimes, copyright and patent are oldest and perhaps best known. Both started with similar time limited exclusive statutory monopolies and necessary formalities of registration or deposit to obtain the protection, but over time, copyright has extended the duration of protection and diminished the formalities required for protection to the point where it is potentially the most restrictive grant for the longest period of time. Patents were originally granted to encourage the use and full disclosure of how new inventions worked by providing inventors with compensation for such disclosure, while copyrights were originally granted to provide authors with compensation and with credit for their creative expressions. It is this dual function of copyright, incentive and acknowledgment of authorship that has led to some confusion about the content of the bundle of rights granted by the statutory monopoly, their appropriate duration and the question of access to the work by others. 5 1.2.1 Types of Interests Recent Supreme Court of Canada cases involving copyright have wrestled with the notion of types of interest included in the "bundle of rights" granted by the Canadian ' Copyright Act. Most prominent have been two cases heard in 2002 and 2004. 1.2.2 Theberge v. Galerie d'Art du Petit Champlain Inc. In the seminal Theberge case of 2 0 0 2 t h e Supreme Court o f Canada concerned itself with the content of the bundle of rights and the appropriate remedies available to a rights holder against an alleged infringer. Whi le the rights holder sought relief under the Canadian Copyright Act against the making unauthorized copies of their work, a 4-3 divided Court found that the exclusive economic right to make copies of a work necessitated the manufacture of new manifestations of the work in addition to the original. In this case the original was destroyed in the process of creating a new work, so the protection against "copying" did not come into play. As the action was based upon unauthorized copying it failed, despite the possibility of a claim for an infringement of moral rights caused by the destruction of the integrity of the original work. Mr . Justice Binnie wrote the majority opinion for the Court in which he emphasized the importance of distinguishing between economic and moral rights in the Canadian Copyright Act. B y so doing he indicated the concern for the balancing o f rights between both creators and users of copyright material. His identification of this concern would later be echoed by majority decisions of the Court when they cited Theberge with approval. As Binnie J stated: 1 Theberge v. Galerie d'Art du Petit Champlain Inc., [2002] 2 S.C.R. 336, 2002 SCC 34 (CanLII), 210 D.L.R. (4th) 385; 17 C.P.R. (4th) 161; 23 B.L.R. (3d) 1, [hereinafter Theberge}. 2 See McLachlin C.J. below at CCH Canadian Ltd. v. Law Society of Upper Canada [2004] 1 S.C.R. 339 [hereinafter cited as CCH] at para 8. 6 Economic vs. moral rights 59 The separate structures in the Ac t to cover economic rights on the one hand and moral rights on the other show that a clear distinction and separation was intended. Professor Ysolde Gendreau is one of those who have drawn attention to this rather rigid compartmentalisation: Unfortunately, the present text of the Copyright Act does little to help the promotion of the fusion of moral rights with the economic prerogatives o f the law, since there is no comprehensive definition of copyright that embodies both. Section 3 of the Act , which is drafted as a definition of copyright, only refers to the economic dimension of copyright. Mora l rights are defined and circumscribed in entirely distinct sections. This absence of cohesion leads to the separate mention of "copyright" and "moral rights" whenever Parliament wants to refer to both aspects of copyright law and to the near duplication of the provision on remedies for moral rights infringements. (Y. Gendreau, "Moral Rights", in G . F. Henderson, ed., Copyright and Confidential Information Law of Canada (1994), 161, at p. 171) (See also R. G . Howel l , L . Vincent and M . D . Manson, Intellectual Property Law: Cases and Materials (1999), at p. 383.) This is not to say that moral rights do not have an economic dimension (e.g., there may be an economic aspect to being able to control the personality-invested "moral" rights of integrity and attribution) or to deny that there is a moral rights aspect to copyright (e.g., a critic may reproduce parts of the text o f a book when reviewing it, but it w i l l be considered a breach of the author's economic rights unless his or her authorship is attributed). However, in terms of remedies, the distinction in the Act between the two sets of rights is clear. 60 M y view is that Parliament intended modification without reproduction to be dealt with under the provisions dealing with moral rights rather than economic rights. To adopt a contrary view, i.e., to treat the modification of the substrate here as the violation of an economic right, would allow copyright holders other than the artist to complain about modification (despite the non-assignability of moral rights). It would allow an artist who objected to a "modification" of an authorized reproduction both to sidestep the independent evaluation of a judge in unleashing a pre-judgment seizure in Quebec, and to sidestep at a trial anywhere in Canada the important requirement of showing prejudice to honour or reputation in order to establish an infringement of moral rights. 61 Could the economic rights of the sculptor of the descending geese at the Eaton Centre be said to be infringed (quite apart from his moral rights) because the seasonal "combination" of geese plus Christmas ribbons could be considered a "reproduction"? The be-ribboned flock incorporated the original artistic work in more than "substantial part", no doubt, but there was no "reproduction" in any 7 legal sense, any more than there was "reproduction" when the appellants in this case contributed blank canvas to the "combination" of ink layer and canvas. The sculptor rightly invoked his moral rights against the Eaton Centre, not economic . rights. 3 It should be noted that Theberge was a split decision, with three justices of the civiliste tradition dissenting in 2002. Apparently these three justices were not persuaded by Justice Binnie 's distinction between moral rights requiring proof o f damage to the artist's reputation and legal copyright associated with the manufacture of infringing new copies of the artist's protected works. The civiliste tradition sees copyright ant moral rights as indistinguishable, hence the moniker of "artists' rights countries." However, another seminal copyright case that followed Theberge at the Supreme Court of Canada in 2004. 1.2.3 CCH v. Law Society of Upper Canada This was a case discussing whether or not the provision of an unsupervised photocopier in the library amounted to an authorization of copyright infringment. The Supreme Court of Canada again found against the copyright holder. However, as this case did not involve moral rights the decision was unanimous. McLach l in C J held that: 6 Wi th respect to the main appeal, I conclude that the Law Society did not infringe copyright by providing single copies of the respondent publishers' works to its members through the custom photocopy service. Although the works in question were "original" and thus covered by copyright, the Law Society's dealings with the works were for the purpose of research and were fair dealings within s. 29 of the Copyright Act. I also find that the Law Society did not authorize infringement by maintaining self-service photocopiers in the Great Library for use by its patrons. I would therefore allow the appeal. 7 On the cross-appeal, I conclude that there was no secondary infringement by the Law Society; the fax transmissions were not communications to the public and the Law Society did not sell copies of the publishers' works. In light of my finding on appeal that the 3 Binnie J Theberge at paras 59-61. 8 Law Society's dealings with the publishers' works were fair, it is not necessary to decide whether the Great Library qualifies for the library exemption. This said, I would conclude that the Great Library does indeed qualify for this exemption. Finally, in light of my conclusion that there has been no copyright infringement, it is not necessary to issue an injunction in this case. I would dismiss the cross-appeal.4 In this case the divisions of opinion at the Supreme Court seem to have been reconciled concerning the goals and aims of copyright law. Importantly for the purposes of this thesis, the Chief Justice went on to discuss the goal and aim of copyright law by citing Binnie J. from Theberge with approval: 9 In Canada, copyright is a creature of statute and the rights and remedies provided by the Copyright Act are exhaustive: see Theberge v. Galerie d'Art du Petit Champlain inc., [2002] 2 S.C.R. 336, 2002 S C C 34, at para. 5; Bishop v. Stevens, \ 19901 2 S.C.R. 467, at p. 477; Compo Co. v. Blue Crest Music Inc., [1980] 1 S.C.R. 357, at p. 373. In interpreting the scope of the Copyright Act's rights and remedies, courts should apply the modern approach to statutory interpretation whereby "the words of an Ac t are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act , and the intention of Parliament": Bell Express Vu Limited Partnership v. Rex, [2002] 2 S.C.R. 559, 2002 S C C 42, at para. 26, citing E . A . Driedger, Construction of Statutes (2nd ed. 1983), at p. 87. 10 Binnie J. recently explained in Theberge, supra, at paras. 30-31, that the Copyright Act has dual objectives: The Copyright Act is usually presented as a balance between promoting the public interest in the encouragement and dissemination of works of the arts and intellect and obtaining a just reward for the c rea to r . . . . The proper balance among these and other public policy objectives lies not only in recognizing the creator's rights but in giving due weight to their limited nature. In interpreting the Copyright Act, courts should strive to maintain an appropriate balance between these two goals. 5 4 McLachlin C.J. CCH at para 8. 5 McLachlin C.J. CCH al paras 9 and 10. Theberge and CCH are watershed cases in recent Canadian copyright law advancing the notion that there are competing creator and user rights to be considered in any copyright infringement action and that a balance o f those rights is to be attained. One example of how such a balance might be tipped too far in favour of the creator is the widening of what qualifies for protection under copyright law. 1.2.4 Erosion of the Idea/Expression Dichotomy In U . S . copyright law "(b) In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery regardless of the form in which it is described, explained, illustrated, or embodied in such a work." 6 Probably the seminal case on the difference between protectable expression and unprotectable ideas was Baker v. Selden, which concerned a book on book-keeping written by Charles Selden. The Court found that "blank account books are not the subject of copyright; and that the mere copyright of Selden's book did not confer upon him the exclusive right to make and use account- books, ruled and arranged as designated by him and described and illustrated in said book." 7 In CCH Chief Justice McLach l in cited well established principles concerning the idea/expression dichotomy in Canadian copyright law: Copyright law protects the expression of ideas in these works; it does not protect ideas in and of themselves. Thorson P. explained it thus in Moreau v. St. Vincent, [1950] Ex. C R . 198, at p. 203: It is, I think, an elementary principle of copyright law that an author has no copyright in ideas but only in his expression of 617U.S.C. §102(b). 7 Bradley J in Baker v. Selden U.S. Supreme CourtlOl U.S. 99 (1879). {as cited in Merges ibid., p. 356. 10 them. The law of copyright does not give him any monopoly in the use of the ideas with which he deals or any property in them, even i f they are original. His copyright is confined to the literary work in which he has expressed them. The ideas.are public property, the literary work is his own. It flows from the fact that copyright only protects the expression of ideas that a work must also be in a fixed material form to attract copyright protection: see s. 2 definitions o f "dramatic work" and "computer program" and, more generally, Goldner v. Canadian Broadcasting Corp. (1972), 7 C.P.R. (2d) 158 (F.C.T.D.) , at p. 162; Grignon v. Roussel (1991), 38 C.P.R. (3d) 4 (F.C.T.D.) , at p. 7. 8 Copyright law since 1989 (when the U.S. became a Berne Convention signatory and the Universal Copyright Convention [hereinafter referred to as U. C. C] requirements were largely abandoned) has fewer required formalities for the recognition of copyright. Broad definitions of "derivative work", and the question of copyright established by either "sweat of the brow" or low standards of what constitutes an "original" work, have enabled some copyright holders to bring actions for infringement that might best be characterized as an erosion of the idea/expression dichotomy of copyright law. In the CC/Ycase McLach l in C J discussed the controversy between advocates of "sweat of the brow" (evidence of labour) and "creativity" requirements of an "original work" as follows: 15 There are competing views on the meaning of "original" in copyright law. Some courts have found that a work that originates from an author and is more than a mere copy of a work is sufficient to ground copyright. See, for example, University of London Press, Ltd. v. University Tutorial Press, Ltd., [1916] 2 Ch. 601; U & R Tax Services Ltd. v.H&R Block Canada Inc. (1995), 62 C.P.R. (3d) 257 (F.C.T.D.) . This approach is consistent with the "sweat of the brow" or "industriousness" standard of originality, which is premised on a natural rights or Lockean theory of "just desserts", namely that an author deserves to have his or her efforts in producing a work 8 McLachlin C.J. CCH at paras 6 and 7. 11 rewarded. Other courts have required that a work must be creative to be "original" and thus protected by copyright. See, for example, Feist Publications Inc. v. Rural Telephone Service Co., 499 U.S. 340 (1991); Tele-Direct (Publications) Inc. v. American Business Information, Inc., [1998] 2 F .C . 22 (C.A.) . This approach is also consistent with a natural rights theory o f property law; however it is less absolute in that only those works that are the product of creativity w i l l be rewarded with copyright protection. It has been suggested that the "creativity" approach to originality helps ensure that copyright protection only extends to the expression of ideas as opposed to the underlying ideas or facts. See Feist, supra, at p. 353. 16 I conclude that the correct position falls between these extremes. For a work to be "original" within the meaning of the Copyright Act, it must be more than a mere copy of another work. A t the same time, it need not be creative, in the sense of being novel or unique. What is required to attract copyright protection in the expression of an idea is an exercise of ski l l and judgment. B y ski l l , I mean the use of one's knowledge, developed aptitude or practised ability in producing the work. B y judgment, I mean the use of one's capacity for discernment or ability to form an opinion or evaluation by comparing different possible options in producing the work. This exercise of skil l and judgment w i l l necessarily involve intellectual effort. The exercise of skill and judgment required to produce the work must not be so trivial that it could be characterized as a purely mechanical exercise. For example, any skil l and judgment that might be involved in simply changing the font of a work to produce "another" work would be too trivial to merit copyright protection as an "original" work. 9 This attempt to locate the correct position between the two extremes represents the striving for a balance between creator and user rights in CCH. It might be suggested that this is a reaction against changes in the copyright law regime that have continued to tip the balance toward creator rights since 1988. 1.2.5 Broadening of Definition of Expression to include Neighbouring Rights In 1988 the Canadian Copyright Act was amended to include neighbouring rights within it. Prior to 1997 much litigation disputed whether or not expression for the purposes of the Canadian Copyright Act included the work of performers, record 9 McLachlin C.J. CCH at paras 15 and 16. 12 producers, and broadcasters. Wi th the passage of S.C. 1997, C24, s. 2.1 (formerly B i l l C-3 2), Part II—Copyright in Performer's Performances, Sound Recordings and Communication Signals was added to the Canadian Copyright Act granting a term o f rights lasting fifty years after the end o f the calendar year of its first fixation, performance or broadcast (Copyright Act s. 23(1)). Much o f the agitation for additions to the Canadian Copyright Act came from the performers, record producers and broadcasters lobbying through the Canadian Conference of the Arts. A s Professor Vaver pointed out: Theoretically, none of these persons is an author, none does anything "original," none produces a "work". Performers interpret or execute works, record producers record them, broadcasters transmit them, so none is entitled to a traditional copyright. 1 0 Here we have evidence o f the stretching of the Canadian Copyright Act in 1997 to include protection for a number of activities never anticipated in the original Act. I would argue that this stretching of the original Act upset the balance between creator and user rights. 1.2.6 Retrospective Extension of Term of Copyright Protection Another more recent example of tipping the balance in favour of the creators at the expense of the users is lengthening the term of copyright protection. This has not happened since 1924 in Canada, but in the U.S . and in Great Britain the term of copyright protection has been lengthened significantly. In the recent case of Eldred v. Ashcroft" the constitutionality of the extension of the period of copyright duration to life of the author plus 70 years enabled by the Sonny Bono Amendment was recently upheld in the U . S . This new duration of copyright brought the U . S . copyright regime into line with 1 0 David Vaver, Intellectual Property Law Copyright Patents Trade-Marks, (Irwin Law: Toronto, 1997), p. 23. 11 Eldred v. Ashcroft, 537 U.S. 186 (2003). 13 European Union standards. The extension of the period of protection, while perhaps not advisable, is certainly precedented in the history of copyright law. However, given the U.S. constitutional requirement that copyright law "promote progress in the useful arts and sciences", the question of whether or not retroactive extension of the period of duration for works done by authors who are deceased was considered unsettled in the U.S. A real argument can be made that prospectively increasing the incentive to create (i.e. the duration of the period within which one enjoys the fruits of exclusive economic exploitation of the work) can be interpreted as "sweetening the pot" for l iving and future authors. However, to retrospectively increase the incentive to create w i l l have no effect upon the creation of more works by the deceased authors. In fact, the recapture of works from the Public Domain by this new regime w i l l actually come at a societal cost in terms of restricted access to existing works. Although the U.S. Supreme Court found in favour of the constitutionality o f the amendment, the two dissenting judges express some of the misgivings of copyright scholars concerning retrospective term extensions. 1.3 Widened Definition of "Contributing to Infringement" Another method of tipping the balance of copyright law towards the interests of creators at the expense of users has been to widen the definition of an infringer of copyright. A difficulty for most copyright holders is that they are often forced to pursue their potential customers for individual acts of copyright infringement. Since the damages for these individual acts of copyright infringement may not amount to what it costs to litigate, authors and publishers have found their rights frustrated. In the U.S. this has led to the development of a "contributing to infringement" doctrine that includes those who would provide the means for others to infringe. The aggregate damages for 14 which these contributors could be held liable are sufficiently large to warrant long expensive litigation. It is analogous to being an accessory to a crime or abetting a criminal. It is on the basis of this "contributing to infringement" that recent successful actions have been brought forward in the U . S . against Napster and Grokster and other file sharing companies. However, there are limits to this widened definition limiting liability for manufacturers who provide the technology that enables infringement. Perhaps the most important U . S . case is the Sony v. Betamax case of 1984 1 2 where the legitimate time shifting uses of the V C R enabled Sony to avoid liability for "contributing to infringement". This case called for a balancing of rights between the right of access to technology for legitimate uses against the right of the copyright holder to protection against the misuse of that technology. It is important to note that despite the recent finding against Grokster, the Sony case still remains good law in the U.S . In both Napster13 and the Grokster,14 evidence o f imprudent advice to customers to download resulted in "unclean hands" for the defendants. 1.3.1 "Authorizing Infringement" in Canadian Cases Compared In Canada, recent copyright infringement cases concerning the downloading of music without the payment of royalties such as SOCANv CAIP [2004] 1 5 , and BMG [2005] 1 6 have reached both the Federal Court of Appeal and the Supreme Court. These 12 Sony Corp. v. Universal City Studios, Inc., (1984) 464 U.S. 417 [hereinafter Sony]. 13 Napster Inc. v. A & MRecords Inc. 239 F.3d 1004, 1029 (9th Cir. 2001). 14 Metro-Goldwyn-Mayer Studios Inc. v. Grokster. Ltd, Case No. 04-480. (U.S. Supreme Court June 27, 2005) Metro-Goldwyn-Mayer Studios Inc. v. Grokster Ltd. 545 U.S. Supreme Court (2005). [hereinafter Grokster]. 15 Society of Composers, Authors and Music Publishers of Canada v. Canadian Assn. ofInternet Providers, [2004] 2 S.C.R. 427, 2004 SCC 45 (CanLII); (2004), 240 D.L.R. (4th) 193; (2004), 32 C.P.R. (4th) 1 [hereinafterSOCANv. CAIP]. 16 BMG Canada Inc. v. Doe 2005 FCA 193 [hereinafter BMG]. 15 cases have followed on the heels o f important downloading cases in the U . S . such as Napster and Grokster where rights holders have been successful in obtaining a remedy against third parties for providing the technical means by which infringement can take place by steadily eroding the exemption from "contributing to infringement" liability that had been established in the Sony case of 1984. In Canada there is no "contributing to infringement" provisions within the Copyright Act; however, it is illegal to "authorize" infringement. The distinction between "contributing to" and "authorization o f has led to a lesser erosion of the Sony type exemption for third parties for ISPs in Canada than in the U .S . Canadian jurisprudence on downloading has endeavoured to maintain the proper balance struck by Parliament between creator and user rights. 1.3.2 SOCANvCAIP Also in 2004 in SOCANv CAIP, Binnie J. indicated an appreciation in the Court for the difficulties faced by copyright holders in the music business. He noted: Achieving a Balance Fair to Copyright Owners 129 There is no doubt that the exponential growth of the Internet has created serious obstacles to the collection of copyright royalties. A s Pietsch, supra, writes, at p. 278: The Internet makes it possible for large numbers of people to rapidly copy protected materials worldwide. Wi th software like Gnutella, they can do so without any centralized clearinghouse that intellectual property owners could target in an effort to enforce copyright protection, such as Napster. Such developments have led some to hypothesize that copyright law is dead because technology is so far ahead of the law that enforcement is impossible, and should not even be attempted. See, e.g., A & MRecords, Inc. v. Napster, Inc., 114 F.Supp.2d 896 (N.D. Cai . 2000), aff d in part, 239 F.3d 1004 (9th Cir . 2001). 130 It has been estimated that in 2002 sales of recorded music fell by almost 10 percent due to Internet-based file sharing (see Anonymous, "The music industry: 16 In a spin", The Economist (March 2003), at p. 58), but this "estimate" is a matter of ongoing controversy. Some say Napster was a boon to the music recording industry. 1 7 Considering whether ISPs should be liable for authorizing infringement, he held: 120 Authorizing a communication by telecommunication is a discrete infringement of s. 3(1); see Compo, supra, at pp. 373 and 376. 121 The respondent argues that even i f the appellants did not themselves infringe the copyright, they were guilty of "authorizing" content providers to do so because Internet intermediaries know that material (including copyright material) placed on their facilities by content providers w i l l be accessed by end users. Indeed as Evans J .A. pointed out, at para. 120: "Knowledge of the content available on the Internet, including Tree' music, and of end users' interest in accessing it, are powerful inducements for end users to sign up with access providers, and content providers with operators of host servers." 122 O f course there is a good deal of material on the Internet that is not subject to copyright, just as there was a good deal of law-related material in the Great Library at Osgoode Hal l that was not copyrighted in the recent CCH appeal. In that case, as here, the copyright owners asserted that making available a photocopier and photocopying service by the Law Society of Upper Canada implicit ly "authorized" copyright infringement. This Court, however, held that authorizing infringement under the Copyright Act is not so easily demonstrated, at para. 38, per McLach l in C.J . : . . . a person does not authorize infringement by authorizing the mere use of equipment that could be used to infringe copyright. Courts should presume that a person who authorizes an activity does so only so far as it is in accordance with the law. . . . This presumption may be rebutted i f it is shown that a certain relationship or degree of control existed between the alleged authorizer and the persons who committed the copyright infringement. . . . [Emphasis added.] See also Vigneux v. Canadian Performing Right Society, Ltd., [1945] A . C . 108 (P.C.); Muzak Corp. v. Composers, Authors and Publishers Association of Canada, Ltd., [1953] 2 S.C.R. 182. S O C A N contends that the host server in essence acts as a commercial partner with the content provider when material is made available on the Internet, but there was no such finding o f fact by the Board, and I do not think the rights and obligations o f partnership can be so casually imposed. 123 The operation of the Internet is obviously a good deal more complicated than the operation of a photocopier, but it is true here, as it was in the CCH case, that when massive amounts of non-copyrighted material are accessible to the end user, it is not possible to impute to the Internet Service Provider, based solely on 1 7 Binnie J, SOCAN v. CAIP, paras 129-130. 17 the provision of Internet facilities, an authority to download copyrighted material as opposed to non-copyrighted material. 127 The knowledge that someone might be using neutral technology to violate copyright (as with the photocopier in the CCH case) is not necessarily sufficient to constitute authorization, which requires a demonstration that the defendant did "(g)ive approval to; sanction, permit; favour, encourage" (CCH, at para. 38) the infringing conduct. I agree that notice of infringing content, and a failure to respond by "taking it down" may in some circumstances lead to a finding of "authorization". However, that is not the issue before us. Much would depend on the specific circumstances. A n overly quick inference of "authorization" would put the Internet Service Provider in the difficult position of judging whether the copyright objection is well founded, and to choose between contesting a copyright action or potentially breaching its contract with the content provider. A more effective remedy to address this potential issue would be the enactment by Parliament of a statutory "notice and take down" procedure as has been done in the European Community and the United States. 128 In sum, I agree with the Court of Appeal that "authorization" could be inferred in a proper case but all would depend on the facts. 1 8 Binnie J. indicates that the Canadian definition of "authorization of infringement" would still be conditioned by the defence o f legitimate use for the technology found in the American Sony case. It would also indicate that to be vicariously liable for infringement of copyright by "authorization of infringement", the authorizer must take a more active role in encouraging or urging infringement than the U.S . contributor to infringement.. 1.4 New Developments i n Patent L a w Patents are another of the traditional forms of IPR protection. Perhaps nowhere else is the social contract and incentive justification for the limited term statutory monopoly so clearly demonstrated. The U . S . Patent Office is the busiest in the world granting more and more patents to inventors as the value of past patents has become apparent. Patent law grants the shortest period of exclusive legal ownership rights (20 Binnie J, SOC AN v. CAIP [2004] SCC 45, paras 120-128. 18 years) and demands execution Of the most specific formalities. A patent application must fully disclose a new and non-obvious useful invention for the first t ime 1 9 and make claims for all o f its functions before getting approval from the Patent Office for inclusion in the Patent Register. If we look to patent disputes in court we find questions about patentability, challenges to the claims made in the applications, allegations of flaws in the disclosure or process of patents granted and motions for the striking of the patent, allegations of patent misuse (i.e. withholding of patented medicines), and new use or functions for compounds patented for other purposes. A valid patent provides the owner with strict liability protection against infringers, and in the case of pharmaceuticals the rewards for such patents can be considerable. Litigation costs tend to pale in comparison to the profits that can be won or lost by the upholding or striking of an individual patent. A s a consequence patent litigation can be extensive. Patent law has not remained static in the new order, as recently as 1989 Canada moved from a "first to invent" to a "first to register" system. Where older patent disputes depended upon proving when an invention was first made and by whom, now the registry establishes who shall own the patent. Thus, registration formalities are of critical importance in patents (unlike copyright law). 1.4.1 Patent Formalit ies One aspect of patent law is the strict formalities that inventors must satisfy in order to obtain their patent protection. For instance in Dutch Industries v Commissioner of Patents20, a patentee who was a "small entity" assigned the patent to an assignee who was not a "small entity" who continued to pay the annual fees at the wrong level. When 1 9 Or within a specified period of time from the first application in another jurisdiction partaking in the International Patent Treaty for the receipt of a patent in more than one jurisdiction at the same time. 20 Dutch Industries Ltd. v. Canada (Commissioner of Patents), (2001) 14 CPR 4th 499, 2001 FCT 879, [2002] 1 C325 (FCTD) [Hereinafter cited as Dutch Industries v. Commissioner of Patents]. 19 the error was brought to the attention of both the patentee and the Commissioner of Patents, the Patent Office allowed a correction of the fees paid. This was challenged in court by the alleged patent infringer who argued that the patent was no longer valid because of the payment of the small entity fee and that the Commissioner did not have the authority to accept corrections after a certain length of time. The Federal Court of Appeal in Barton No Till21 found that there was no authority for the Commissioner o f Patents to correct the Registry at such a late date and struck out one of the patents owned by the large entity from the register. However, the Court also found that the patent granted to the small entity and assigned to the large entity remained valid, as the status of the patentee as a large or small entity was determined at the time of the granting of the original patent. This finding saved the striking o f one of the patents from the register through an unnoticed error in the calculation of the nominal annual fee, but points out that the presumption that once a patent is granted and entered into the register it is presumed valid may not be true in every case. The Federal Court of Appeal decision was 22 appealed to the Supreme Court but the appeal was dismissed with costs . 1.4.2 Broadening of Definition of "Invention": Business Methods, Living Organisms (Higher and Lower Life Forms), and the Doctrine of Equivalents Once again patent law can be used to tip the balance in favour of the inventor over the user of an invention by widening the definition of what is patentable. In Canada one of the most important recent S.C.C. cases concerning patents had to do with the 21 Barton No-Till Disk Inc. v. Dutch Industries Ltd (2003 FCA 121) [hereinafter cited as Barton No Till]. 22 Dutch Industries Ltd. v. Barton No-Till Disk Inc., Flexi-Coil Ltd. and The Commissioner of Patents (F.C.) (29738) (The motion to adduce fresh evidence is granted and the application for leave to appeal is dismissed with costs to the respondents Barton No-Till Disk Inc. and Flexi-Coil Ltd.) OTTAWA, 11/12/03. 20 patentability of higher life forms. The so-called Harvard Mouse case resulted in a split court where the majority found that the higher life form of an oncology mouse was not an invention under the Canadian Patent Act and upheld the Patent Office's refusal to grant a patent. This decision was taken despite the nearly ubiquitous international acceptance of the patentability of the oncomouse. The Harvard Mouse case is at the end of a line o f jurisprudence beginning in the U . S , with Diamond v. Chakrabarty24 where the question was whether or not a human-made genetically engineered bacterium capable of breaking down crude oi l was a patentable invention under the U.S. Patent Act. The U . S . Supreme Court held that, " A live, human-made micro-organism is patentable subject matter under 101. Respondent's micro-organism constitutes a "manufacture" or "composition o f matter" within that statute." Since 1980 the question of how to draw the line between "lower life forms" such as bacteria and "higher life forms" such as mammals has confronted courts around the world. 1.4.3 Harvard Mouse Case in Canada (a Different Approach) Most countries have allowed that the genetically engineered oncomouse is a patentable composition of matter. In Canada following Chakrabarty the Canadian Patent Office in Re Abitibi Co. listed human made items it deemed patentable. The Patent Office ruled that . . . all micro-organisms, yeasts, moulds, fungi, bacteria, actinomycetes, unicellular algae, cell lines, viruses or protozoa; in fact.. .all new life forms which are produced en masse as chemical compounds are prepared, and are formed in such 2 3 Harvard College v. Canada (Commissioner of Patents) [2002] 4 S.C.R. 45; 2002 SCC 76 [hereinafter cited as Harvard Mouse]. 24 Diamond v. Chakrabarty 447 U.S. 303 (1980) (U.S. Supreme Court)[hereinafter Chakrabarty}. 21 large numbers that any measurable quantity w i l l possess uniform properties and characteristics. Having ruled that life forms could be patented, it was therefore a surprise when in the Harvard Mouse case it was ruled in a split decision 5-4 that higher life forms could not be. L'Heureux-Dube, Gonthier, Iacobucci, Bastarache and LeBe l JJ formed the majority. Bastarache J writing for the majority held that, " A higher life form is not patentable because it is not a "manufacture" or "composition of matter" within the Oft meaning of "invention" in s. 2 of the Canadian Patent Act.'" McLach l in C.J . and Major, Binnie and Arbour JJ. dissented and Binnie J wrote the eloquent dissent from the majority decision: 1 B I N N I E J. (dissenting) — The biotechnology revolution in the 50 years since discovery o f the structure of D N A has been fuelled by extraordinary human ingenuity and financed in significant part by private investment. L ike most revolutions, it has wide ramifications, and presents potential and serious dangers as well as past and future benefits. In this appeal, however, we are only dealing with a small corner of the biotechnology controversy. We are asked to determine whether the oncomouse, a genetically modified rodent with heightened genetic susceptibility to cancer, is an invention. The legal issue is a narrow one and does not provide a proper platform on which to engage in a debate over animal rights, or religion, or the arrogance of the human race. 2 The oncomouse has been held patentable, and is now patented in jurisdictions that cover Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, The Netherlands, Portugal, Spain, Sweden, the United Kingdom and the United States. A similar patent has been issued in Japan. New Zealand has issued a patent for a transgenic mouse that has been genetically modified to be susceptible to H I V infection. Indeed, we were not told of any country with a patent system comparable to Canada's (or otherwise) in which a patent on the oncomouse had been applied for and been refused. 3 If Canada is to stand apart from jurisdictions with which we usually invite comparison on an issue so fundamental to intellectual property law as what constitutes an "invention", the respondent, successful everywhere but in Canada, 25 ReAbitibi Co. (1982), 62 C.P.R. (2d) 81at 89 (patent Appeal Bd. & Commissioner of Patents) [Abitibi]; Re Application for Patent of Connaught Laboratories (1982), 82 C.P.R. (2d) 32 (Patent Appeal Bd. & Commissioner of Patents). As cited in David Vaver, Intellectual Property, n. 49 p. 124. 2 6 Bastarache J Harvard Mouse paras 119-120. 22 might expect to see something unique in our legislation. However, one looks in vain for a difference in definition to fuel the Commissioner's contention that, as a matter of statutory interpretation, the oncomouse is not an invention. The truth is that our legislation is not unique. The Canadian definition of what constitutes an invention, initially adopted in pre-Confederation statutes, was essentially taken from the United States Patent Act o f 1793, a definition generally attributed to Thomas Jefferson. The United States patent on the oncomouse was issued 14 years ago. M y colleague, Bastarache J., acknowledges that the fertilized, genetically altered oncomouse egg is an invention under our Patent Act, R .S .C . 1985, c. P-4 (para. 162). Thereafter, we part company, because my colleague goes on to conclude that the resulting oncomouse, that grows from the patented egg, is not itself patentable because it is not an invention. Subject matter patentability, on this view, is lost between two successive stages of a transgenic mouse's genetically pre-programmed growth. In my opinion, with respect, such a "disappearing subject-matter" exception finds no support in the statutory language. 4 A patent, of course, does not give its holder a licence to practise the invention free o f regulatory control (any more than an unpatented invention enjoys such immunity). On the contrary, the grant of a patent simply reflects the public interest in promoting the disclosure of advancements in learning by rewarding human ingenuity. Innovation is said to be the lifeblood of a modern economy. W e neglect rewarding it at our peril. Having disclosed to the public the secrets of how to make or use the invention, the inventor can prevent unauthorized people for a limited time from taking a "free ride" in exploiting the information thus disclosed. A t the same time, persons skilled in the art of the patent are helped to further advance the frontiers of knowledge by standing on the shoulders of those who have gone before. 2 7 Justice Binnie demonstrated a concern with international standards of patentability in his dissent: 12 Intellectual property has global mobility, and states have worked diligently to harmonize their patent, copyright and trademark regimes. In this context, the Commissioner's approach to this case sounds a highly discordant note. Intellectual property was the subject matter of such influential agreements as the International Convention for the Protection of Industrial Property {Paris Convention) as early as 1883. International rules governing patents were strengthened by the European Patent Convention in 1973, and, more recently, the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) in 1994 (1869 U . N . T . S . 299). Copyright was the subject of the Berne Convention for the Protection of Literary and Artistic Works in 1886, revised by the Berlin Convention o f 1908 and the Rome Convention o f 1928. The Universal Copyright Convention was concluded in 1952. Legislation varies of course, from state to Harvard Mouse, paras 1-4. 23 state, but broadly speaking Canada has sought to harmonize its concepts of intellectual property with other like-minded jurisdictions. 2 8 Confronting other concerns of the majority Binnie J seemingly chafes against the strict definition of "invention" in the Canadian Patent Act when he notes: 95 Such an argument relates to remedies rather than patentability. A view that the Patent Act rewards a patent owner too richly is not a sound basis on which to deny a patent. The inventor of the frisbee (patented in 1967) would also, no doubt, be thought by some critics to have been excessively rewarded. 96. The scientific accomplishment manifested in the oncomouse is profound and far-reaching, and a numerical count of the genes modified and the genes not modified misses the point. Every cell in the animal's body has been altered in a way that is profoundly important to scientific research. If researchers were to discover that cancers were entirely attributable to one gene and then modified individuals so that they were cancer-free, no one would deny that such a modification would be of enormous importance regardless of the fact that only one gene was changed. 97 Researchers who wish to use a wi ld mouse can catch one in the parking lot. H a r v a r d would have no complaint. It is only i f they wish to take advantage of the advances in learning disclosed in the oncomouse patent that they would require authorization from the inventor who made the disclosure they now seek to exploit. 98 If the patent were refused on the oncomouse itself, it would be easy for "free riders" to circumvent the protection sought to be given to the inventor by the Patent Act simply by acquiring an oncomouse and breeding it to as many wi ld mice as desired and selling the offspring (probably half of which wi l l be oncomice) to the public. The weakness of this protection would undermine the incentives intended by the Patent Act. I agree with Wi l l i am Hayhurst when he writes: Some patents for processes may be of little practical value. To discover that a competitor is carrying out the process may be difficult. If a process produces a l iving organism that reproduces itself, the process may have to be carried out only once: competitors who are able to get their hands on the organism need not repeat the process of producing it. What is needed is a patent for the organism (W. L . Hayhurst, "Exclusive Rights in Relation to L iv ing Things" (1991) 6 I.P.J. 171, at p. 177) 2 9 It is Justice Binnie's concern about "free riding" that marks the dissent in this important case. In this instance the minority would see the denial of patentability for the Harvard Mouse, para 12. Harvard Mouse, paras 95-98. 24 oncomouse as tipping the balance too far away from creator rights. However, the majority felt that the prohibition against the patentability o f higher life forms must stand. 1.4.4 Eros ion of Compulsory Licens ing Provisions in Canada Part of the reason why the Supreme Court may have this disagreement over the appropriate balance between creator and user rights in patent law may be because of the long history of litigation between research-based pharmaceutical companies and the generic drug companies. Canada has a long history of compulsory licensing provisions beginning in 1923 but not really being used until the period following 1969 when a s. 41(4) amendment to the Canadian Patent Act allowed for the importation o f the active ingredient of generic drugs. This led to the establishment of a large generic pharmaceutical drug industry in Canada and considerable cost savings for such pharmaceuticals. We are told that within one year by 1970 some 52 generic drug companies were established in Canada. 3 0 This would lead to the establishment in Canada of the world's largest generic drug companies such as Apotex. While these generic drug companies ensured rather cheaper drugs for Canadians, for years they were a sore spot with the research-based pharmaceutical companies. Following negotiations and Harry Eastman's Commission of Enquiry in 1985, a 1987 amendment to the Canadian Patent Act was passed that lengthened the period of exclusive legal right to exploit new patents from four years to ten years, in return for an undertaking on the part of the research-based 3 0 Aslam H. Anis, Pharmaceutical Policies in Canada: Another example of federal-provincial discord CMAJ, 162 (4) February 22, 2000 . 3 1 Mr. John Solomon in Hansard 1994 Thursday. April 28. 1994 - PRIVATE MEMBERS' BUSINESS (059) says,"The Eastman committee which studied drug patents and costs in 1983 claimed that across Canada at that time the public saved $211 million per year in drug costs from generics. In 1986 the Canadian Drug Manufacturers Association, which is the organization of companies that manufacture generic drugs in Canada, estimated that compulsory licensing saved us about $500 million a year." 25 (innovation based) pharmaceutical companies to invest between 5% and 10% of Canadian sales into Canadian research and production of pharmaceuticals. B i l l C-22 of 1987 also established the Patented Medicines Price Review Board to ensure that only moderate increases in the price of pharmaceutical drugs would be experienced in Canada. 3 2 However, Canada's weak protection of the intellectual property rights of the research-based pharmaceutical companies continued to be a point of contention internationally and between Canada and the U.S . , despite the lengthened period of exclusivity and the compliance of the research-based pharmaceuticals with their pledged investment into Canadian pharmaceutical research and development. GATT concerns, the Canada-U.S. Free-trade agreement of 1989 and NAFTA negotiations eventually led to a compromise between the Mulroney Government and the Bush government. Canada agreed to the strengthening of patent protection for the research-based pharmaceutical patent holders by ending compulsory licensing with B i l l C-91 3 3 and extending the period of exclusive protection to the full twenty year duration of the patent. This amendment led to immediate cost increases for Canadian health care and was controversial in the provinces that bear the costs of such increases especially Saskatchewan, which spent an estimated $10 mil l ion more in the first year following passage of C - 9 1 . 3 4 A s drugs were delisted from medical services and as health care costs have spiraled, there have been calls for the repeal of the amendment since before M r . Solomon's Private Member's Business remarks of 1994. More recently, as Canada considered allowing the exporting 3 2 Much of this history is related by Dennis J. Mills, Parliamentary Secretary to the Minister of Industry in response to Mr. Solomon, as recorded in Hansard April 28, 1994 Thursday, April 28, 1994 - PRIVATE MEMBERS' BUSINESS (059) . 33 Patent Amendment Act, C-2, S.C. 1993. 26 of A I D S / H I V generic drugs to developing nations, the Amendment has come under fire again but the Federal Government has been loathe to try to "unscramble the omelet" (to paraphrase M r . Don Boudria at the time) created by the passage o f the amendment. It is thought that Canada would suffer significant consequences in the international community were it to weaken its protection of patent holder rights. However, more recently, the humanitarian justification of the export of generic pharmaceuticals to the developing world has encouraged the generic pharmaceuticals to urge Canada to re- evaluate the benefits of compulsory licensing and the promotion of the generic drug company industry. The end of compulsory licensing has not come without cost in Canada, despite the increased investment of innovation-based companies and the benefits of free trade with the U . S . and Mexico. A n examination of the Federal Court Trial docket reveals a number of lengthy actions between the generics and the research-based pharmaceuticals including multiple motions (sometimes scores of such motions) and appeals of rulings on motions in these actions. Despite the costs in court time, expensive litigation representation and potential adverse rulings, the economic stakes are so high that the costs of litigation are just a small part of the cost of doing business in the pharmaceutical drug business. Similarly the cost pressures on the public health care system in Canada have been exacerbated. This is far from a dead issue and underscores the tension between rights holders and the public in patent law. Strengthened patent law at the expense of the public good is a counter-balance to the trend toward stronger and more pervasive IPR protection. Perhaps because so much intellectual property litigation concerns these issues 3 4 See especially the comments of Mr. John Solomon in Hansard 1994 Thursday, April 28, 1994 - PRIVATE MEMBERS' BUSINESS (059). 27 the judiciary in Canada is more concerned with finding the appropriate balance between creator and user rights. 1.5 New Developments i n Trade-mark L a w Like patent law, trade-mark law is still very closely tied to the execution of formalities by the rights holder to gain protection. It can be argued that this is because trademark protection represents the one form of intellectual property protection that is not finitely limited in time. Instead, to encourage manufacturers and providers of goods and services to use these marks for the benefit of consumer protection, there are substantial formalities of registration and "use" o f a mark in channels of trade. Marks must be defended against "dilution" whereby the mark is "genericized" to the point where it no longer functions as an indicator of place of origin or standard of quality. Licensees must defend their exclusive right to use o f the mark or risk losing the protection o f the mark and trade-mark owners must be able to demonstrate continued control over the mark when licensed elsewhere. Fees must be paid at regular intervals (annually) to demonstrate continued use in order for the trade-mark owner to avail itself of protection against unauthorized use of the mark or infringement. Registered marks must be renewed every fifteen years or risk expungement from the register after the passage of six months after the fifteenth anniversary of the last registration. Owners of marks can be required to prove their "use" within the past three years or face being struck from the register. A s in patent law proposed trade-marks must go through a registration process where opposition to the registration of the mark can be initiated. A s a patent can be challenged by the patent officer or in court for obviousness, insufficient disclosure, or lack of inventiveness, so a trademark can be challenged by the Trade-mark Office before 28 registration, after publication and even after registration for a lack of distinctiveness, the use of prohibited marks or priority of "use" in a jurisdiction. The process of "disclaiming" those parts of the trademark that are not eligible for registration is an important protection against the staking out of language or expression common and necessary to all. The prohibition against the lack of distinctiveness or the use of a l iving person's name can be appealed provided the applicant can show that distinctiveness has been achieved through use. Trade-mark law remains a hybrid between common law remedies for passing off, defamation and deceit and statutory provisions. C i v i l code countries have long experience with the registration of proposed marks; common law countries have had experience with the establishment of trademark rights by use. Trade-mark law has traditionally been concerned with using private actors to ensure the continued legitimate use of trademarks for consumer protection. However, as trademarks have become established they have become recognized as a valuable asset associated with the businesses that use them. The value attached to the use of a trademark or trade guise is most often referred to as the "goodwil l" built up by the common experience of consumers with the mark. A s these marks are alienable, the marks with greater goodwill value attached are more valuable and trademark law has become increasingly concerned with allowing the owner of such marks to defend that value against diminishment through either dilution or tarnishment. Nowhere has this acknowledgment of the value of goodwill become clearer than in the use o f the trademark as a domain name in cyberspace. Cybersquatters have rushed to register domain names before the value of such registrations have become appreciated by traditional firms. 29 Famous cases such as the Panavision dispute have led to calls to control this usurpation of the goodwill established for known trademarks and trade guises. This in turn has led to the call for protection for famous marks in the form of legislated remedies. 1.5.1 U . S . Famous M a r k s Legislat ion (Protection from Cybersquatting) In the U . S . there has been a tradition of intervention on behalf of the rights holder to forestall "free riding" going back to the invention of a new cause o f action in tort law for an "unfair taking" in the famous, i f controversial, INS case . Following INS Frank Schecter wrote an influential article on dilution theory in 1927. This theory proposes that the owner of a trademark suffers injury worthy of remedy when their mark is weakened by dilution through blurring or tarnishment. Consequently, trademark owners underscored the conflict between Trademark Rights and Freedom of Speech Rights have agitated to be allowed to prohibit such expressions by the public as would constitute dilution. In some thirty states they were successful, but there were legal scholars such as Robert C. Denicola who pointed out there were consequences of this expansion o f trademark law to protect the investment in the "goodwil l" attached to the marks. However, with the advent of the Internet and the prevalence of cybersquatting, American sympathies for the victims of "unfair taking" or "coattail riders" led to a renewed interest in the protection of trademark holder rights over the freedom of speech rights of the general public. This emphasis on the statutory trademarks rights holder's interests in the U . S . has been demonstrated most recently in the passing into law of the 35 Panavision International, L.P. v. Toeppen, 141 F.3d 1316 (9th Cir. 1998). 36 International News Service v. Associated Press (1918) 248 U.S. 215; 63 Law. Ed. 211 [hereinafter cited as INS]. The case has been controversial since it was decided over an eloquent dissent by Brandeis J and expressly rejected in other common law jurisdictions. 3 7 Frank I. Schechter The Rational Basis of Trademark Protection, 1927, 40 Harvard Law Review 813. 30 1996 Federal Anti-Dilution Act that has been called by Kenneth L . Port an "unnatural expansion of trademark rights. 4 0 The Act has been criticized as too vague and overly broad and has been challenged constitutionally 4 1. David v. Radack discusses how dilution can take place in two ways, blurring and tarnishment, and describes the Act as follows: The existence of this act has given holders of famous trademarks another weapon in policing noncompetitive uses of their marks; although there were more than 30 states that had statutes concerning the dilution of trademarks previous to 1996, until the new federal act there was no federal statute providing owners of famous trademarks the ability to bring a lawsuit in a federal court under federal law. The act has also been used extensively in internet domain name disputes.... Trademark dilution under the new federal law can occur even when a famous trademark is used by another on noncompeting goods or can occur when there is no likelihood of confusion between the two uses of the mark. For example, if a company that makes motorcycles started using the mark Kodak to identify its motorcycles, consumers would probably not be confused into believing that the Kodak film people are now in the motorcycle business. Thus, trademark dilution under the new law is a powerful weapon where there is noncompeting goods or services or no likelihood of confusion between the uses of the marks.42 It is this ability to use the Act to block the use of the mark or descriptor in new unrelated channels of trade for non-competing goods or services not covered by the registered mark, without the need to prove confusion among consumers, that represents a substantial expansion of the protections afforded by traditional trade-mark law. Robert C. Denicola, Trademarks as Speech: Constitutional Implications of the Emerging Rationales for the Protection of Trade Symbols, 1982 Wis. L. Rev. 158, 160 (1982). 3 9 15 U.S.C. TITLE 15 > CHAPTER 22 > SUBCHAPTER III > § 1125. False designations of origin, false descriptions, and dilution forbidden, see especially (c). 4 0 Kenneth L. Port, The "Unnatural" Expansion of Trademark Rights: Is a Federal Dilution Statute Necessary?, 18 Seton Hall Legis. J. 433, 448-49 (1994). 41 Maria J. Kaplan, "Antidilution Statutes and the First Amendment," 21 Southwestern University Law Review 1139 (1992) (arguing that antidilution statutes violate the First Amendment because they prohibit commercial speech that does not mislead or deceive and because there is no substantial government interest to support them; also arguing that antidilution laws are not designed to protect the public, as was trademark law's historical purpose. As cited in ACLU Testimony of Marvin J. Johnson, Legislative Counsel, at a Hearing on the Committee Print to Amend the Federal Trademark Dilution Act Before the Subcommittee on Courts, the Internet, and Intellectual Property of the House Committee on the Judiciary April 21, 2004 n. 2.) 31 1.5.2 Canadian Responses In Canada where INS was rejected, the courts have thus far adopted a more cautious and tightly defined definition of trade-mark law still rooted in notions o f channels of trade and the need to prove the likelihood of consumer confusion to obtain remedy. This caution was the result of the successful constitutional challenge in MacDonald v. Vapor43 to the rather broad prohibition against unfair trade practices contained in s. 7(e) o f the Canadian Trade-marks Act. It would be well to remember that the successful challenge was because the provision was deemed too vague and broad to be practicable. The extension of protection beyond the existing channels of trade to non- competing products has been called "brand extension" theory by Daniele Tremblay- Lamer J. recently in Veuve Clicquot Ponsardin v. Les Boutiques Cliquot Ltee.44 Resisting the too broad protection against dilution without proof of consumer confusion in cases involving owners of famous trade-marks disputing the use of a similar or identical name in different channels of trade, she rejected this extension without proof of damage in this case. The case had to do with the use of the Cliquot name on goods by a Montreal women's clothing manufacturer rather than the famous champagne manufacturer. It was appealed to the Federal Court of Appeal 4 5 where she was upheld. This case and another case disputing the use of the word "Barbie" in a trade-mark in Montreal, were further appealed to the Supreme Court of Canada. 4 2 David V. Radack, "Federal Trademark Anti-Dilution Law—A Powerful New Tool for Owners of Famous Trademarks" JOM, 51 (4) (1999), p. 48. 43 MacDonald v. Vapor Canada Ltd. (1976), [1977] 2 S.C.R. 134, 66 D.L.R. (3d) 1, 25 C.P.R. (2d) 1, 7 N.R. 477. 44 Veuve Clicquot Ponsar din v. Les Boutiques Cliquot Ltee. 2003 FCT 103 para 10. 45 Veuve Clicquot Ponsardin v. Les Boutiques Cliquot Ltee. 2004 FCA 164. 32 On June 2, 2006 two unanimous decisions written by Binnie J. upholding the lower court rulings in Veuve Clicquot and Barbie have clarified the requirements for protection under the Canadian Trade-Marks Act against trade-mark infringement in non- competing products or services in instances where there is a famous trade-mark. 4 6 The Court has said that where the goods or services are not in the same channel of trade, there must be proof of damages to the famous or senior mark holder's goodwill or proof of a likelihood of consumer confusion in order to receive protection against dilution under the Canadian Trade-Marks Act. This is a blow to the concept of a "family of marks" belonging to large diversified international companies seeking protection for their "famous trade-marks". It is a ruling that stands in stark contrast with the law of trade- marks concerning marks owned by a "public authority" such as the Canadian Olympic Association. For a "public authority" injunctive protection against dilution can be obtained without proof of the likelihood of confusion in separate channels of trade so long as the public has received notice of the restriction on the use of the mark or derivative marks. Clicquot and Barbie distinguish the marks of "public authorities" from "famous marks" for the purposes of trade-mark protection. They establish a standard of proof need to attract protection under the Act although they leave open the right of the senior mark holder to oppose the registration of the junior mark. The decision is a thoughtful one, balancing the owner rights with those of the public. Had Mattel prevailed we could anticipate that the use of the term "barbie" could have become the exclusive property of the Mattel Toy Manufacturing Company. Whether that means that Paul Hogan and the Australian Tourism Authority would have 46 Veuve Clicquot Ponsardin v. Les Boutiques Cliquot Ltee. 2006 SCC 23, which followed Mattel Inc. v. 3894207 Canada Inc., 2006 SCC 22 [hereinafter referred to as Barbie]. Both decisions were released on 33 been precluded from using the phrase "Toss another shrimp on the barbie" as an invitation to visit Australia without Mattel's permission is not clear. However, the decision is a victory for the common property of the English language that includes the term "Barbie." Similarly in the case of Clicquot, the use of "Cliquot" on the women's apparel needed proof of the likelihood of consumer confusion or proof of the likelihood of some form of tarnishment to qualify for protection under the Act. To allow a s. 22 prohibition against depreciation of the goodwill attached to a mark without proof of the likelihood of depreciation through dilution is to encourage the abuse of the Trade-Marks Act for purposes of censorship. To date, in Canada trade-mark owners have not had very much success with claims for dilution or tarnishment unless the goods bearing the marks were of the same class and capable of giving rise to consumer confusion. 4 7 Where such confusion is not proven the Canadian Trademarks Act has left the famous mark holder without injunctive remedy. 4 8 There is current agitation to amend the Canadian Trademarks Act to provide remedies for owners of famous marks to bring Canadian law more into line with that of other jurisdictions such as the U.S . , the E . U . and Great Britain. 1.5.3 Preserving the Value of Goodwill through "Dilution" Prevention While in Canada, trademark owners may not have so much protection against infringement in non-competing products or service marks or dilution as in the U.S . , Canadian trademark owners must still be careful to assert their rights or risk having their mark become genericized through dilution. Once a mark is found generic it cannot be June 2, 2006. 4 7 See the Leaf confectioners case atLeaf Confections Ltd. v. Maple Leaf Gardens Ltd., (1986), 12 C.P.R. (3d) 511. 48 See Pink Panther Beauty Corp. v. United Artists Corp., 1998 CanLII 9052 (F.C.A.i. [1998] 3 F.C. 534. 34 registered and must be struck from the registry. Examples o f trademarked terms that were found generic under U . S . law include: " A s p i r i n " 4 9 , "Cellophane" 5 0 , "thermos" 5 1 , "Murphy bed" 5 2 , and "Shredded Wheat" 5 3 . Justice Brandeis' discussion o f "genericide" in Kellogg v. Nabisco is instructive. He said: The plaintiff has no exclusive right to the use of the term "Shredded Wheat" as a trade name. For that is the generic term of the article, which describes it with a fair degree o f accuracy; and is the term by which the biscuit in pillow-shaped form is generally known to the public. Since the term is generic, the original maker of the product acquired no exclusive right to use it. A s Kel logg Company had the right to make the article, it had, also, the right to use the term by which the public knows i t . . . . Moreover, the name "Shredded Wheat," as well as the product, the process and the machinery employed in making it, has been dedicated to the public. The basic patent for the product and the process of making it, and many other patents for special machinery to be used in making the article, issued to Perky. In those patents the term "shredded" is repeatedly used as descriptive of the product. The basic patent expired October 15, 1912 the others soon after. Since during the life of the patents "Shredded Wheat" was the general designation of the patented product, there passed to the public upon the expiration of the patent, not only the right to make the article as it was made during the patent period, but also the right to apply thereto the name by which it had become known. A s was said in Singer Mfg. Co. v. June Mfg. Co., 163 U . S . 169, 185 : It equally follows from the cessation of the monopoly and the falling of the patented device into the domain o f things public, that along with the public ownership of the device there must also necessarily pass to the public the generic designation of the thing which has arisen during the monopoly.. .To say otherwise would be to hold that, although the public had acquired the device covered by the patent, yet the owner of the patent or the manufacturer of the patented thing had retained the designated name which was essentially necessary to vest the public with the full enjoyment of that which had become theirs by the disappearance of the monopoly . 5 4 4y Bayer Co. v. United Drug Co., 272 F. 505, 509 (S.D.N.Y. 1921). 50Dupont Cellophane Co. v. Waxed Products Co., 85 F.2d 75, 81 (2d Cir), cert, denied 299 U.S. 601, 57 S.Ct. 194, 81 L. Ed. 433 (1936). 51 King-Seeley Thermos Co. v. Aladdin Indus., Inc.32\ F.2d 577, 579 (2d Cir. 1963) Although the U.S. Courts allowed that international competitors of Thermos in the U.S. could not use Thermos with a capital "T", add their own brand name or use the worlds like "original" or "genuine" with their use of the mark, the term "thermos", while not generic enough to warrant expungement, also was not distinctive enough to warrant full exclusive use. Cf. with Aladdin Industries Inc. v. Canadian Product Ltd., [1969] 2 Ex.C.R. 80. • 52 The Murphy Door Bed Co., Inc. v. Interior Sleep Systems, Inc. United States Court of Appeals, Second Circuit, 874 F.2d 95 (2d Cir, 1989). "Kellogg Co. v. National Biscuit Co., 305 U.S. I l l , (1938) [hereinafter Kellogg v. Nabisco]. 54 Kellogg v. Nabisco, at 116-118. 35 Justice Brandeis went on to discuss the plaintiffs claim that the words had acquired "secondary meaning" but he ruled that, .. .to establish a trade name in the term "shredded wheat" the plaintiff must show more than a subordinate meaning which applies to it. It must show that the primary significance of the term in the minds of the consuming public is not the product but the producer. This it has not done. 5 5 In Intellectual Property in the New Technological Age there is a discussion of the 1896 Singer Mfg. Co. v. June Mfg. Co. case cited by Brandeis for the proposition that once a patent on a device expires, the name by which the device has been sold also enters the public domain. It declares that "Surely that is not always the case." 5 6 Pointing out that many formerly patented devices are still sold bearing the name after the expiration of the patent and that there are different purposes behind the patent and trademark acts, it is only when the name itself is generic that trademark does not survive the expiration of the patent. Thus the determination of when a mark has become generic is of utmost importance to the rights holders. Further reference inMerges is the Lanham Act §14 (15 U . S . C . §1064) which provides that "[t]he primary significance of a registered mark to the relevant public rather than purchaser motivation shall be the test for determining whether the registered mark has become generic." 5 7 This provision was put in place in the Trademark Clarification Act o f 1984 to reverse the holding in Anti-Monopoly, Inc. v. General Mills Fun, 684 F.2d 1316 (9 t h ir. 1982), cert, denied, 459 U.S . 127 (1983). In this case the 9 t h Circuit had ruled that the term "Monopoly" was generic and that "Anti-Monopoly" could 55 Kellogg v. Nabisco, at 118. 5 6 Merges, Robert P. Peter S. Menell, Mark A. Lemley, Thomas M. Jorde. Intellectual Property in the New Technological Age, New York: Aspen Law & Business, 1997, p. 706 [hereinafter Merges]. 57 Merges, p. 706. 36 be sold. Surely there are costs associated with the defence of a mark against becoming generic. Merges58 reproduced a Xerox trademark advertisement. GroupXerox actively fought the genericide of the term Xerox to mean photocopy with a vigorous defence ' against its use as a synonym for photocopying. Dupont also vigorously defended "Teflon" against becoming generic by use of an education and policing plan. 5 9 The leading Canadian case on genericism would seem to be Aladdin Industries Inc. v. Canadian Product Ltd.,60 where it was found " . . .that distinctiveness for a significant minority of consumers was enough to stave of expungement". 6 1 Sti l l the requirement for distinctiveness is not one trademark holders can afford to take lightly. 1.5.4 Erosion of Distinction between Trade Dress and Function The potential use of trade dress to extend the duration of exclusive protection for inventions whose patents have expired had recently led to uncertainty in trade-mark law in Canada. The Lego decision from the Supreme Court of Canada in Kirkbi AG v. Ritvik Holdings62 settling this issue was released November 17, 2005. In this case the manufacturer of Lego blocks sought to gain protection for its eight knobbed blocks by resorting to trademark law after its patent expired. The courts below have found that the trade dress shape of the blocks is determined by their function, and under the doctrine of functionality, the only part of the Lego knobs that could be considered trade dress is that part bearing the company name Lego on them. This reasoning has led to a split in the Federal Court of Appeal decision and a subsequent appeal to the Supreme Court of 58 Merges. Fig. 5-2, p. 704 5 9 See E.I. Du Pont de Nemours & Co.v. Yoshida Intl.Jnc. 393 F.Supp.502, 523-24 (E.D.N.Y. 1975) 60 Aladdin Industries Inc. v. Canadian Product Ltd., [1969] 2 Ex.C.R. 80. 6 1 Vaver, Intellectual Property Law,p. 190. 62 Kirkbi AG v. Ritvik Holdings 2003 FCA 297, SCC appeal [2005] 3 S.C.R. 302, SCC 2005 65 (heard 2005-03-16). Kirkbi AG, etal. v. Ritvik Holdings Inc./Gestions Ritvik Inc. (now operating as Mega Bloks Inc.) (FC) (Civil) (By Leave) (29956) [hereinafter cited as Lego}. 37 Canada that was heard in March of 2005 . The S .C.C. upheld the lower court decisions and the doctrine of functionality, denying the mark holder remedy for trade-mark infringement. 1.6 "Sui Generis" Evergreen Provisions and the Diminishing Public Domain A n important concept in the granting o f statutory rights to creators and assignees is the necessity of a chronologically "limited" term for IPR protection, so as to ensure the acquisition of new knowledge within the public domain. Examining the development of the E. U. Database Directive and its potential to keep all intangible property found in databases out of public domain, it is hoped that the folly of new forms of IPR protection introduced without sufficient forethought is an obvious danger that can be associated with the drafting of new legislation without sufficient care as to its effect. While , as we shall see in Chapter 3, there are problems with the use of old laws to deal with the new situations in cyberspace, the development of entirely new laws ("sui generis") raises a number of important difficulties. First among these difficulties is that of jurisdiction. Again, as we shall see in Chapter 4, the TRIPS64 agreement of 1994 represents a high water mark in terms of international multi-lateral agreement that may be impossible to replicate beyond the acceptance of existing traditional IPR protection legal regimes. Furthermore, disagreement over the appropriate balance of creator and user rights and the role o f the public domain may make any sui generis legal developments hard for some countries to recognize. We shall return to this problem in Chapter 5. Unt i l then we must look at the evidence that IPR protection law needs reform or change. It can be argued 63 Lego, the case is discussed with respect to the Doctrine of Functionality in Chapter 2 below. 64 WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), negotiated in the 1986-94 Uruguay Round. 38 that current IPR law seems to be trending towards stronger creator rights at the expense of other stakeholders. Let us review the problem. 1.7 Evidence of Strengthened "Creator Rights" Among Traditional IPRs 1.7.1 Increased Duration of Copyright Outside of Canada Duration of copyright has been extended retroactively 6 5 to 70 past the death of the creator in the U.S . , despite a constitutional challenge. In Europe and many c iv i l code countries the term o f copyright duration is 70 years or more past the year of death o f the creator. Nevertheless, currently under TRIPS the minimum is a duration of 50 years past the year of death of the creator. Whi le it is currently only 50 years in Canada, this seems bound to come under pressure to lengthen to European and U . S . standards. O f course this term of duration is one related to the life of the author or creator, for other works created in situations where the life of the author is not known or copyright ownership is not associated with the life of the creator, the term is different. Usually for unpublished works the term is unlimited until publication and then runs for 50 years in Canada. Similarly for fdm and photographs the term of protection runs for 50 years from the date of manufacture. 6 6 For anonymous works the term can run for 50 years from the date of first publication. For "neighbouring rights" the term is 50 years from first public performance, sound recording or broadcast. 1.7.2 Posthumous IP Rights and Bequeathing Related to the increased length of copyright has been the ability of such rights to become part of the creator's estate. Whether or not the anticipation of these post-mortem rights is a necessary part of the incentive for progress in the useful arts and sciences 65 See Eldred v. Ashcroft, 537 U.S. 186 (2003) U.S. Supreme Court. 6 6 Vaver, Intellectual Property, pp. 63-4. 39 seems to be taken for granted. Copyright can be bequeathed for between 50 and 75 years after the death of the creator depending on the jurisdiction. Subsection 14(1) of the Canadian Copyright Act provides for a limitation and reversion of assigned interests to the author's estate 25 years after his/her death. Patents, while they can be bequeathed, still only extend for 20 years. Concerning the Succession of Mora l Rights in Canada Mora l Rights provisions Copyright Act, ss. 14.1 (2) which allows no assignment of moral rights and 14.2(2), (3), which allows for the moral rights to pass to whomever they have been bequeathed, to the inheritor of the copyright or to the inheritor o f the author's estate. 1.7.3 Extensions of Copyright to include Adaptations or "Derivative Works" Eroding the distinction between "expression" (copyrightable) and "idea" (noncopyrightable), the extension of copyright to include "derivative works" can be argued to allow the copyright holder to protect too wide an area within the granted statutory monopoly. Depending upon the breadth of interpretation of "derivative work" the public domain can be seriously diminished. In the Mirage Editions v. Albuquerque A.R.T.,67 Mirage was able to sue A . R . T . for copyright infringement when A . R . T . physically cut photographic reproductions of artist Patrick Nagel 's works out of numerous purchased copies of coffee-table books published by Mirage, glued them to ceramic tiles and offered them for sale. The court held that A . R . T . was not protected by the "first sale" doctrine (exhaustion doctrine in Europe) and had created unauthorized "derivative works". Mirage Editions v. Albuquerque A.R.T. 856 F.2d 1341 (9' Cir. 1988)[hereinafter referred to as Mirage]. 40 Derivative works in this 9 Circuit Court of Appeals case and the 7 Circuit Court of Appeals Lee v. A.R.T. Co. American case that rejected Mirage, were discussed by Binnie J in Theberge as follows: re derivative work and Mirage and Lee art U S cases 72 The poster art industry in the United States has been actively litigating the broad statutory "derivative works" provision against owners of the material objects that embody the copyrighted work. In Mirage Editions, supra, for example, the copyrighted image was applied to a ceramic tile. The 9th Circuit Court o f Appeals ruled that the ceramic was an infringing "new" derivative work, a conclusion expressly rejected by the 7th Circuit Court of Appeals in Lee v. A.R.T. Co., 125 F.3d 580 (1997), which concluded that the fixation did not infringe the copyright. Easterbrook J., for the 7th Circuit, reasoned that "[a]n alteration that includes (or consumes) a complete copy of the original lacks economic significance" (p. 581). He further found that there was no distinction between framing works o f art, an acceptable practice under copyright law, and more permanent methods of display, such as re-fixing the art work on tile. The 9th Circuit has taken a different view: see Mirage Editions, supra. These cases and their progeny typically turn on conflicting interpretations of the words "recast, transformed, or adapted" in the U . S . statutory definition, but even under that more expansive U . S . definition of "derivative works" the 7th Circuit concluded that permanently mounting the artwork on tile did not "recast, transform, or adapt" the work. If these words appeared in our Act , there would presumably be a similar battle o f statutory construction here, with the respondent saying the work was "recast, transformed, or adapted", and the appellants denying that characterization, but the conflict between the scope of the copyright holders' economic rights to control the end uses of his work and the purchasers' rights as owners of the material object is the same. In the absence of the "recast, transformed, or adapted" language (or equivalent) in our Act , however, the respondent is unable to rely on it as an additional basis of copyright liability. A s Estey J. noted in Compo, supra, at p. 367: . . . United States court decisions, even where the factual situations are similar, must be scrutinized very carefully because of some fundamental differences in copyright concepts which have been adopted in the legislation of that country. 73 I should note that while there is no explicit and independent concept of "derivative work" in our Act , the words "produce or reproduce the work . . . in any material form whatever" in s. 3(1) confers on artists and authors the exclusive right to control the preparation of derivative works such as the union leaflet incorporating and multiplying the Michel in man in the Michelin case, supra. See generally, M c K e o w n , supra, at p. 64. In King Features Syndicate, Inc. v. O. and M. Kleeman, Ltd., [1941] A . C . 417 (H.L.) , under a provision in the English Ac t similar to s. 3(1) of our Act, the plaintiffs copyright in the cartoon character 41 "Popeye the Sailor" was held to be infringed by an unauthorized doll , i.e., the two dimensional character was reproduced without authorization in a new three- dimensional form. See also W . J. Braithwaite, "Derivative Works in Canadian Copyright Law" (1982), 20 Osgoode Hall L.J. 191, at p. 203. To the extent, however, that the respondent seeks to enlarge the protection of s. 3(1) by reading in the general words "recast, transformed, or adapted" as a free-standing source of entitlement, his remedy lies in Parliament, not the courts. Vl .Conclusion with Respect to the Substantive Issue 74 M y conclusion is that in this case the respondent is asserting a moral right in the guise o f an economic right, and the attempt should be rejected. 75 If the respondent's argument were correct in principle, o f course, the absence of authority would not prevent his success. It is in the nature of the subject that intellectual property concepts have to evolve to deal with new and unexpected developments in human creativity. The problem here is that the respondent's submission ignores the balance of rights and interests that lie at the basis of copyright l aw. 6 8 1.7.4 Adopt ion of Neighbouring Rights A s mentioned above, the stretching o f the Canadian Copyright Act beyond the printed word through notions of fixation (Canadian Admiral69) to include performer's rights, sound recordings and broadcasts in 1989 means that copyright law now refers to much more than merely the control over the ownership, number and exploitation rights of copies of an artistic work. The advent of many new media and digitalized versions of older creative works mean that there wi l l be pressure on Canada's Copyright Act to include protection for works fixed in new ways and new media. If this protection is retrospective we may find much taken back from the public domain and placed again under the control of the statutory monopoly known as copyright protection. Canada's adoption of neighbouring rights under copyright has enabled Canadians to use copyright law to accomplish what tort laws in the U.S . concerning the misappropriation of the right 6 8 Binnie J, Theberge v.Galerie d'Art du Petit Champlain Inc., [2002] 2 S.C.R. 336, 2002 SCC 34 (CanLII) (2002), 210 D.L.R. (4th) 385; (2002), 17 C.P.R. (4th) 161; (2002), 23 B.L.R. (3d) 1 paras. 72 -75. 69 Canadian Admiral Corp. v. Rediffusion Inc., [1954] Ex.C.R. 382, 20 C.P.R. 75, 14 Fox. Pat. C. 114. 42 of publicity have done. Evidence of this can be seen in the cases dealing with inalienable moral rights of creators such as Snow v. Eaton's Centre70. 1.7.5 Inalienable Moral Rights of Creators In order for IPRs to provide economic incentive for innovation the current regimes have made the rights alienable. This has allowed the IPR holder to be a different person or entity than the creator, most commonly entrepreneurs, corporations, publishing companies, institutions and so on. In c iv i l code countries, and within Canada since 1931, artists and creators are accorded certain inalienable moral rights including the right o f authorship and the right to the physical integrity o f the work bearing their name. These rights have been asserted in c iv i l rights countries basing copyright protection on personality rights, but opposed in many common law countries who base their copyright on economic incentive justifications. Once again the leading Canadian case on moral rights is Snow. Moral rights are personal rights and normally not alienable from the author or creator. This makes them a different set of rights awarded in the copyright law bundle to the creator or author. In Canada moral rights are not assignable although they may be waived. They currently have the same duration as copyright. 1.7.6 Droits de suite Droits de suite are rights associated with a creator's right to some portion of the fair market value gain realized upon the resale of their work. These rights are recognized on a state level in California and in several c ivi l code jurisdictions. Probably the strongest droits de suite are to be found in France and then Germany. Droits de suite71 include an ongoing set of inalienable author rights in France. In Germany they have the 70 Snow v. the Eaton Centre Ltd. (1982) 70 C.P.R. (2d) 105 (Ont. H.C.)[hereinafter Snow]. 43 same term as copyright. They include rights after the sale of a work with IPRs attached. The right to a percentage of the capital gain made by the purchaser of a work of art on a resale is considered to be one of the rights associated with the author's rights in these countries. It has been looked upon with suspicion by the U . S . in terms of copyright 77 laws despite similar provisions in State laws (e.g. California). In France, Italy, Chile and California artists have been allowed to recapture a percentage of the resale value of their works, as droits de suite. These resale rights do not currently exist in Federal Copyright law in the U . S . and Vaver pointed out that in Canada as of yet there are no droits de suite, despite Canada's Moral Rights provisions, but their existence in author's rights jurisdictions lead one to believe they could well become part of the WIPO regime in future. A s Binnie J. makes clear in Theberge there are no droits de destination either: 1.7.7 Re Droits de Destination 28 In my view, with respect, this expansive reading of the s. 3(1) economic rights tilts the balance too far in favour of the copyright holder and insufficiently recognizes the proprietary rights of the appellants in the physical posters'which they purchased. Adoption of this expanded interpretation would introduce the civiliste conception of"droit de destination" into our law without any basis in the Copyright Act itself, and blur the distinction between economic and moral rights imposed by Parliament. 7 4 Concerning droits de destination in Canadian law he goes on to explain more fully in the judgment: 7 1 Canada's Moral Rights provisions Canadian Copyright Act, s. 14. 7 2 R. Howell, "Canada: Report on Private International Law Aspects", in Copyright in Cyberspace, Marcel Dellebeke, ed. ALAI Study Days, Amsterdam: Otto Cramwinckel, n. 68, p. 286 tells us that "Moral rights are recognized federally in the United States in the Visual Artists Rights Act 1990, PL No. 101-650, 102 Stat. 5128, 17 USC 101 (1990)," but he judges that the U.S. approach "presents a traditional approach of a common law jurisdiction to the question of moral rights." ibid. 7 3 Vaver, Intellectual Property, p. 67. 7 4 Binnie J, Theberge v, Galerie d'Art du Petit Champlain inc., [2002] 2 S.C.R. 336, 2002 SCC 34 (CanLII) (2002), 210 D.L.R. (4th) 385; (2002), 17 C.P.R. (4th) 161; (2002), 23 B.L.R. (3d) 1 para. 28. 44 63 Under the civiliste tradition, and particularly in France, the right of reproduction was interpreted to include not only the right to make new copies of the work (reproduction stricto sensu) but also what is called by French jurists the "right of destination" (droit de destination). The right of destination gives the author or artist the right to control to a considerable extent the use that is made of authorized copies of his or her work: see generally A . Lucas and H.-J . Lucas, Traite de la propriete litteraire & artistique (1994), at p. 235; F. Pollaud-Dulian, Le droit de destination: le sort des exemplaires en droit d'auteur (1989). See also Crim. , January 28, 1888, Bull, crim., N o . 46, p. 68; Crim. , December 2, 1964, Bull, crim., N o . 320, p. 672; Cr im. , October 20, 1977, Bull, crim., No . 315, p. 801; C iv . 1st, M a y 5, 1976, Bull, civ., No. 161, p. 128; Paris, March 18, 1987, D . 1988.Somm.209, note Colombet; C iv . 1st, A p r i l 19, 1988, Bull, civ., No . 112, p. 76; Paris, A pr i l 27, 1945, Gaz. Pal. 1945.1.192. 64 The "droit de destination" applies in other civiliste jurisdictions. Thus in Hovener/Poortvliet, H R January 19, 1979, N J 412, brought to our attention by counsel for the respondent, the Netherlands Supreme Court found a violation of the droit d'auteur where a purchaser of an authorized art calendar cut out the pictures, stuck them to coasters, and resold them. This was regarded by the court as an altogether new and different "publication". In Frost v. Olive Series Publishing Co. (1908), 24 T . L . R . 649 (Ch. Div.) , by contrast, the English court did not regard as an infringement the cutting out o f pictures from books, pasting them on cards, and reselling. "[The recirculation of] objects already in existence is not reproduction in a material form": Laddie et al., supra, at p. 614. 65 It seems to me that the respondent is pursuing a form of "droit de destination" in this case. But, under our Copyright Act, the "right of destination" as such does not exist. Generally, the copyright holder does not by virtue of his or her economic rights retain any control over the subsequent uses made o f authorized copies of his work by third party purchasers. Where in specified situations the Act gives the copyright holder some power to control or benefit from subsequent uses of authorized copies of his work, the relevant provisions are narrowly framed to apply only to very specific forms of reproduction, as in the case of sound recordings (s. 15(1)) or computer programs (s. 3(l)(h)). If a general right to control subsequent usage existed, it would not have been necessary to make specific provision in these cases. Justice Binnie expressly rejects the right of destination and the civiliste interpretation of copyright law. He frames it as asserting a moral right in the guise of an economic right. He says, Binnie J, Theberge paras. 63-65. 45 Vl.Conclusion with Respect to the Substantive Issue 74 M y conclusion is that in this case the respondent is asserting a moral right in the guise o f an economic right, and the attempt should be rejected. 75 If the respondent's argument were correct in principle, o f course, the absence of authority would not prevent his success. It is in the nature of the subject that intellectual property concepts have to evolve to deal with new and unexpected developments in human creativity. The problem here is that the respondent's submission ignores the balance of rights and interests that lie at the 76 basis of copyright law. Although Justice Binnie found against the rights holder in this case, Gonthier, LeBe l and L'Heureux-Dube JJ. formed a substantial dissent to the Court's majority ruling. 1.8 Strengthened "Creator Rights" in Traditional IPR Protection To assess whether user rights need strengthening in a world where creators and other IPR holders have recently enjoyed growing governmental and inter-governmental support for their exclusory rights we need to consider several important issues and concerns, which include: 1.8.1 The Function and Purpose of Intellectual Property Rights I have defined the functioning of IPRs as the granting of an exclusory right or limited monopoly to encourage innovation or progress in the Arts and Sciences by providing incentives for innovators. Common IPRs are those statutory rights associated with copyright, patents, trade-marks and trade secrets. Recently the development of new "sui generis" rights for computer software has been advocated. Are such new grants of rights required, or is there sufficient incentive in the existing IPRs? W h y should the IPRs be exclusory (i.e., proprietary) and, also, why should they be limited in duration? 46 1.8.2 The Intersection of IPRs with the Free Flow of Information IPRs are statutorily granted monopolies that are often seen as diminishing the free flow of information to the public. The statutory monopoly that is copyright, .patent or trademark stakes out a portion of the lexicon of expression in our culture for the exclusive use of the rights owner for a specified period of time. A s such it lessens the means of expression available to the public for a period of time. It is a temporary infringement on the freedom of expression or freedom of speech that is constitutionally guaranteed. What's more, it enables individuals to claim as their own part of the common property of culture, the vocabulary, grammar, idiom, imagery and shared experience of the culture, for a period of time to enable the rights holder to exploit it economically. For a period of time the owner of the rights can deprive the commons of the use of some part of its expressive capability in return for the sharing of that expression in the form of publication or use. This is a powerful control over knowledge and the social progress that is the result of its shared use. That is why the "Idea" versus "Expression" dichotomy is important and why IPRs should be limited in duration. Creators or authors who take as their creative material some portion of the shared common property that is the sum of language or expressive capability of their society owe the return use of their expressions to their society after they have received appropriate reward for their creative efforts. This is the social pact, this is the moral bargain artists, authors, inventors, and creators enter into with their societies. IPR protection law must reflect this bargain. Binnie J, Theberge paras. 74-75. 47 1.8.3 Ramifications of Strengthened IPRs for Creators at the Expense of User Rights In Canada following the changes in the Canadian Copyright Act in 1989, 1993 77 7R and 1997 and also following changes in the U . S . after 1976 and 1989 copyright "reform" was made at the expense of so-called "user rights". Wi th the demise of a new set of "reforms" for the Canadian Copyright Act with the defeat of the Mart in 7Q government in the fall o f 2005, the question of balance is more critical than ever. Although the Harper government has announced it w i l l reform the Canadian Copyright Act, it has yet to say how. O f particular interest for its future impact on Canadian jurisprudence may be the Digital Millennium Copyright Act [hereinafter cited as the DMCA] signed by President Clinton on October 28, 1998 to make changes in U . S . copyright law to address the digitally networked environment. This law is intended to implement WIPO Internet treaties, which signals the importance of an analysis of the effects of the WTOs\ WIPO, TRIPS*2, NAFTA*3 and other international trade agreements with IPR components. Berne Convention (1971), Paris Convention (1967) U.S. Copyright Act1976 (Pre Ratification of the Berne Convention, January 1, 1978-March 1, 1989) 17 U.S.C. 7 8 17 U.S.C. §1201(a)(3) (1998). 7 9 Bill c-30. 8 0 World Intellectual Property Organization, [hereinafter referred to as WIPO] WIPO is the organization administering for some 171 member countries most of the international intellectual property conventions and agreements such as the Berne Convention, the Madrid Protocol, the Patent Cooperation Treaty. 81 World Trade Organization Marrakesh Agreement Establishing the World Trade Organization (1994), 33 Int. Leg. Mat. 1144.[hereinafter referred to as WTO]. Canada is a Member of the WTO by the World Trade Organization Agreement Implementation Act, R.S.C. 1985, c. 10. 8 2 Agreement on Trade-Related Aspects of Intellectual Property Rights, [hereinafter referred to as TRIPS], Agreement on Trade-Related Aspects of Intellectual Property Rights, part ofMarrakesh Agreement establishing the World Trade Organization, signed in April 1994, in effect in Canada on 1 January 1996. 83 North American Free Trade Agreement Between the Government of Canada, the Government of the United Mexican States and the Government of the United States ofAmerica, Minister of Supply and Services Canada 1993, Ottawa, Dec. 17, 1992 Text., [hereinafter referred to as NAFTA]. This agreement was implemented by Canada's North American Free Trade Implementation Act, S.C. 1993, c. 44. 48 In Chapter 4 we w i l l examine these international agreements and assess what Canada may be required to do to comply with them. It is hoped that a Canadian sensibility for balance between the interests of all stakeholders w i l l enable Canada to construct an IPR protection regime that w i l l satisfy international treaty obligations but also preserve the careful balance of rights between creators and users. This Chapter w i l l prepare us to make conclusions or recommendations in Chapter 5. 1.9 User Rights and a Protected Public Domain It is important to ensure the free flow of ideas and knowledge as an incentive for continued growth of the intellectual capital of the human race. Examining the epistemological history of a number of important concepts in world history, art, technology and science, it becomes clear that the greatest threat to "progress" or the growth of the sum of human knowledge is restriction of the free flow of ideas. Ethical and moral issues such as the withholding o f crucial medical advances from that part of the world unable to afford the tariff o f the IPR holder come to mind here. Controversies surrounding the use of the WTO to enforce TRIPS and the inherent neo-colonial potential of this multi-lateral agreement to enforce the status quo among the have and have-not nations must be considered. Similarly the problem of how to ensure that the innovator or creator is given just recompense for their investment of time and resources into solving epistemological problems for society must also be considered. In CCH the Chief Justice summarized the purpose of the Canadian Copyright Act as follows: 23 A s mentioned, in Theberge, supra, this Court stated that the purpose of copyright law was to balance the public interest in promoting the encouragement and dissemination of works of the arts and intellect and obtaining a just reward for the creator. When courts adopt a standard o f originality requiring only that something be more 49 than a mere copy or that someone simply show industriousness to ground copyright in a work, they tip the scale in favour of the author's or creator's rights, at the loss of society's interest in maintaining a robust public domain that could help foster future creative innovation. See J . Litman, "The Public Domain" (1990), 39 Emory L . J . 965, at p. 969, and C. J . Craig, "Locke, Labour and Limit ing the Author's Right: A Warning against a Lockean Approach to Copyright Law" (2002), 28 Queen's L . J . 1. B y way of contrast, when an author must exercise skill and judgment to ground originality in a work, there is a safeguard against the author being overcompensated for his or her work. This helps ensure that there is room for the public domain to flourish as others are able to produce new works by building on the ideas and information contained in the works of others. (v) Workable, Yet Fair Standard 24 Requiring that an original work be the product of an exercise o f skil l and judgment is a workable yet fair standard. The "sweat of the brow" approach to originality is too low a standard. It shifts the balance of copyright protection too far in favour of the owner's rights, and fails to allow copyright to protect the public's interest in maximizing the production and dissemination of intellectual works. On the other hand, the creativity standard of originality is too high. A creativity standard implies that something must be novel or non- obvious — concepts more properly associated with patent law than copyright law. B y way of contrast, a standard requiring the exercise of ski l l and judgment in the production of a work avoids these difficulties and provides a workable and appropriate standard for copyright protection that is consistent with the policy objectives of the Copyright Act. (yi)Conclusion 25 For these reasons, I conclude that an "original" work under the Copyright Act is one that originates from an author and is not copied from another work. That alone, however, is not sufficient to find that something is original. In addition, an original work must be the product of an author's exercise of skill and judgment. The exercise of skil l and judgment required to produce the work must not be so trivial that it could be characterized as a purely mechanical exercise. While creative works w i l l by definition be "original" and covered by copyright, creativity is not required to make a work "original". 8 4 McLachlin C.J. CCH at paras 23-25. Beginning in the late 1980s and accelerating in the late 1990s, there have been a number of changes in Intellectual Property Rights (IPRs) legislation aimed at strengthening IPR protection. Most of these changes have been aimed at promoting 85 "creator rights". In Canada we have seen recent "reforms" of Canada's Copyright Act (Phase I and Phase II) extending copyright protection to include neighboring rights. In the U.S. Copyright Act86 reforms have extended the period of the statutory monopoly of copyright protection to 70 years past the death of the author (Bono Amendment). In addition the U.S. finally ratified the Berne Convention in 1989 extending greater credibility to that copyright regime. The U.S. has also widened its definitions o f U.S. trademark law beyond statutes designed to prevent consumer confusion to include tarnishment and dilution. The U.S. has also broadened the definition of what is patentable to include computer programs and higher life forms. But what is the cost of this new protection for the statutory monopolies granted for the protection of IPRs? If the so-called "creator rights" continued to be strengthened, it w i l l not be independent of the diminishing of the strength of the so-called "user rights", as represented by public domain. Especially as cyberspace becomes the repository of a greater and greater proportion of human knowledge and ideas, holders of intellectual property rights (IPRs) controlling access to cyberspace through those strengthened legal protections, w i l l become potential gatekeepers of that repository of human knowledge and those ideas. This may represent a return of copyright and other IPRs to a role emphasizing their potential as tools of censors of the free exchange of ideas and human knowledge. Given the potential social importance of this role, it is my thesis that 8 5 Canadian Copyright Act, R.S.C. 1985, c. C-42. 8 6 U.S. Copyright Act, 17 U.S.C.[hereinafter cited as U.S. Copyright Act]. 51 legislation and regulation of IPRs need re-visitation. In order to reconcile adequately the interests of all parties concerned with intangible property, measured consideration for the consequences of any existing or proposed legislation within the new global jurisdiction of cyberspace is required. Recent C R T C decisions not to regulate the Internet at this time and U . S . use of the TRIPS accord to circumvent Cultural Industries exemptions in NAFTA in the "Split- Run Magazine" issue indicate a need for a Canadian rethinking of how best to meet our protection of IPRs. 1.10 Problem: Identify the Appropriate IPR Protection Regime for the Internet Responding to Needs of All the Stakeholders in Cyberspace The first problem in identifying the appropriate IPR protection regime for the Internet is to determine who are all the stakeholders in Cyberspace with an interest in IPRs and to ask the question of how do we ensure their needs are met? Under common law regimes much of the law is formed as a result of the contestation between disputing parties over the issues o f importance to them. It uses an adversarial system to ensure that the best arguments in favour of any party are brought before the tribunal for adjudication. Unfortunately, in the realm of intellectual property, the parties in conflict may or may not include the public at large, the parties charged with administrating the IPR regime in a given jurisdiction or other individuals without official standing in the dispute. This can lead, and I would argue has led, to laws and policies being formulated without sufficient regard to stakeholders not present in the court proceedings. A s a consequence the interests of some stakeholders have been promoted at the expense of others. 52 1.10.1 Stakeholders It is my thesis that to reconcile adequately the interests of all parties concerned with intangible property, measured consideration for the consequences of any existing or proposed legislation within the new global jurisdiction of cyberspace w i l l be required. Furthermore I argue that it is a lack of this measured consideration for the consequences of new legislation that has led to the hurried adoption of measures such as the European Database Directive before its checks and balances have been formulated. This Directive of 1996 8 7 may have so tipped the balance towards IPR holders that access of the general public to knowledge and information previously within the public domain is severely diminished. The European Database Directive adopted in the E C in 1996 and which came into force in 1998 provides a two-tiered approach to database protection for creators. The first is copyright protection in the compilation itself with a duration of the 88 life of the creator and 70 years. The second is a new sui generis database protection per se for fifteen years after its creation. 8 9 This latter provision also allows for this protection to be renewed for a further fifteen-year period whenever a substantial modification of the database takes place. 9 0 This renewal provision has led to an "Evergreen Provision" that some scholars see as endangering the principle of limited duration for IPRs. Directive 96/9/EC of the European Parliament and the Council of 11 March 1996 on the legal protection of Databases, Official Journal, 27/03/1996, L. 077 [hereinafter referred to as the European Database Directive] was implemented October 1, 1998 in accordance with Art. 16. 88 European Database Directive, Chapter III , Article 7.See Jonathan Band and Jonathan S. Gowdy, "Sui Generis Database Protection: Has its Time Come?" unpublished article for the law firm of Morrison & Foerster in Washington D.C. available at Jband(g), or Jgowdy(a>mofo,com . 89 European Database Directive, Article 10(1). 90 European Database Directive., Article 10(3). 53 1.10.2 Authors, Inventors, and Creators Obviously the first stakeholders in the contest between rights holders are the first owners of the intellectual property, normally the author, inventor or creator of the marks. A fair recompense for their efforts is required to justify any societal claim to the fruits of their labour. Traditionally this recompense has come by way of the enjoyment (for a limited period of time) of the profits that come from the statutory monopoly granted to them. However, the rights of this first group are not absolute. A s we shall see there are provisions for the precedence of the public good. Other stakeholders include the assignees ~ those to whom the rights have been assigned. Clearly only the legal rights of copyright can be assigned (moral rights cannot, although they can be waived in Canada), but for those to whom these rights have been assigned by the first owner of copyright, the issues of what protection they have against infringers are crucial. 1.10.3 Public Domain I argue that the most under-represented stakeholder is the public domain. The public domain can be seen as the collective common property of society from which authors, artists and inventors draw the raw material to fashion their expressions, art objects, and inventions. It is the cultural milieu from which a shared grammar and lexicon of expression is gleened. Without a public domain there could be no communication. It is the debt to this public domain that demands the limited duration of statutory monopolies that reward the creators. It is this debt that justifies the full disclosure requirement in patent law. It is this debt that allows the government to restrain others from intruding upon the claims of the granted patent, copyright or trade-mark. 54 Only when the benefits of the new creation are returned to the public domain is the debt cancelled. The question that arises, especially in the case o f retroactively increased posthumous copyright duration, is: who represents the public domain in the adversarial system of the courts? 1.10.4 Bureaucrats and Judic iary Obviously other stakeholders in the protection of IPRs include those bureaucrats administering the Copyright Board, the Patent Office, the Trade-Marks Register and the members of administrative tribunals and the judges of the Federal Court charged with reviewing their decisions. Efficiency and ease of administration, minimization of costs associated with administration and adjudication and clarity of regulations or statutes are major concerns for these stakeholders. Overloading the court with litigation or creating extra expense with court challenges to jurisdiction of tribunals, and questions about the role of the Commissioner of Patents or Registrar of Trade-Marks examiner, all lead to increased workload and expense in the administration of the IPR protection regime. A n y new regime would have to take into account the experience and wishes of those stakeholders. In addition it is in the best interests of lawmakers and statute drafters to write clear comprehensive laws and regulations to ensure the efficient regulation of legal relationships within cyberspace. In Theberge, Binnie J discusses an appropriate balance between the economic interests of the copyright holder and the proprietary interest of the purchasing public, stating, A. The Present Balance Between the Economic Interest of the Copyright Holder and the Proprietary Interest of the Purchasing Public Would be Significantly Altered to the Public's Detriment 55 30 The Copyright Act is usually presented as a balance between promoting the public interest in the encouragement and dissemination of works of the arts and intellect and obtaining a just reward for the creator (or, more accurately, to prevent someone other than the creator from appropriating whatever benefits may be generated). The elements of this balance are discussed in more detail by J. S. M c K e o w n , Fox Canadian Law of Copyright and Industrial Designs (3rd ed. 2000), at p. 3. See also D . Vaver, Intellectual Property Law: Copyright, Patents, Trade-marks (1997), at p. 22. This is not new. A s early as 1769 it was said by an English judge: It is wise in any state, to encourage letters, and the painful researches of learned men. The easiest and most equal way of doing it, is, by securing to them the property of their own works. . . . He who engages in a laborious work, (such, for instance, as Johnson's Dictionary,) which may employ his whole life, w i l l do it with more spirit, if, besides his own glory, he thinks it may be a provision for his family. (Millar v. Taylor (1769), 4 Burr. 2303, 98 E.R. 201,per Willes J., at p. 218) 31 The proper balance among these and other public policy objectives lies not only in recognizing the creator's rights but in giving due weight to their limited nature. In crassly economic terms it would be as inefficient to overcompensate artists and authors for the right of reproduction as it would be self-defeating to undercompensate them. Once an authorized copy of a work is sold to a member of the public, it is generally for the purchaser, not the author, to determine what happens to it. 32 Excessive control by holders of copyrights and other forms of intellectual property may unduly limit the ability of the public domain to incorporate and embellish creative innovation in the long-term interests of society as a whole, or create practical obstacles to proper utilization. This is reflected in the exceptions to copyright infringement enumerated in ss. 29 to 32.2, which seek to protect the public domain in traditional ways such as fair dealing for the purpose of criticism or review and to add new protections to reflect new technology, such as limited computer program reproduction and "ephemeral recordings" in connection with live performances. 33 This case demonstrates the basic economic conflict between the holder of the intellectual property in a work and the owner of the tangible property that embodies the copyrighted expressions. 9 1 How then are we to address the question of appropriate solution to finding this balance? Should we be using existing laws? If so this raises the problem that we wi l l be 9 1 Binnie J, Theberge v. Galerie d'Art du Petit Champlain Inc., [2002] 2 S.C.R. 336, 2002 SCC 34 (CanLII) (2002), 210 D.L.R. (4th) 385; (2002), 17 C.P.R. (4th) 161; (2002), 23 B.L.R. (3d) 1 paras. 30-33. 56 relying on the use of laws designed for different purposes to achieve the solution in the protection of IPRs. For example, we could continue to use censorship-intended copyright laws designed for the control of access to information as a way of generating economic incentives for authors. Or we could continue to use consumer-protection aimed trademark law for protection against loss of goodwill. Or we could continue to use the patent registration process to stake out monopolies at consumer expense. Finally we could continue to allow the use of combinations of IP law to defeat the limitations of individual regimes: for example, the use of trademark law to extend quasi-patent protection or the use o f copyright to extend quasi patent protection or to strengthen trademark protection. We also could allow patent law to defeat fair use. The alternative would seem to be to devise some sort of sui generis regime responding to the requirements of IPR protection and intangible property rights management. One major problem with the sui generis approach is the difficulty of arriving at consensus and international recognition of the new standards. The Berne Convention o f 1896 would not be adopted and ratified by the U . S . until 1989, nearly a century later. The TRIPS agreement was the first multilateral international trade agreement with minimum standards ever adopted. It was brought into existence only in 1994 after much political "arm twisting" by the U . S . and the WTO. It is not clear that international willingness to adopt new standards would be easily attainable. 1.11 Are the Traditional IPRs Appropriate in the new Cyber Age? Notions of the reproducibility of documents and images in cyberspace have led many to question whether control over copyright is even viable. Nimmer has referred to 57 the Internet as a "giant copying machine," and the Napster case concerning the use o f shared music files demonstrated the clash between the doctrine of first sale and copyright infringement. In trademarks, the notions of regional "use" and channels of trade are challenged by the universality of the Net. The issue of cybersquatting has led to an increased sympathy for the use of trademarks law to go beyond the old tort of passing off to include and confront dilution and tarnishment. 1.12 W h o Owns Copyr ight in the Digital ized Version? The question of who owns a "translation" o f public domain information into the new digitalized version is particularly vexing for those who would support the public domain. When access to information is becoming more and more dependent upon access to the cyberworld, it becomes clear that material formerly within the public domain (works of art, literature, f i lm, photographs, documents and artifacts) may now only be available i f a tariff to the holder of the reproduction rights is paid. The situation is not unlike the end of the nineteenth century when there was considerable controversy over claims to ownership of copyright among publishers in a number of different c