46/365 Intellectual Property by Traci Lawson (CC BY 2.0) https://flic.kr/p/63hXJc

46/365 Intellectual Property by Traci Lawson (CC BY 2.0) https://flic.kr/p/63hXJc

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Tackling IP Misuse: Canada Takes the Lead in Combating the Dark Side of Intellectual Property Protection

Navdeep Bains, Canada’s Innovation, Science and Economic Development Minister, unveiled the government’s long-awaited intellectual property strategy Thursday by responding to the need to increase IP awareness, develop new IP tools for businesses, and counter IP misuse that harms both consumers and businesses. The plan to introduce new legislative rules to discourage misuse of intellectual property is particularly noteworthy since the rules should help foster a more progressive, balanced, and innovative legal framework.

My Globe and Mail op-ed notes that with proposed reforms to all of Canada’s main IP statutes, the government is taking the lead in combating the dark side of intellectual property protection. Since abuse of intellectual property rights may inhibit companies from innovating or discourage Canadians from taking advantage of the digital market, crafting rules that address misuse can be as important as providing effective protection.

The Supreme Court of Canada identified the need to address excessive protection in the Théberge v. Galerie d’Art du Petit Champlain inc., a 2002 copyright case that warned “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.”

An obvious example arises from the misuse of Canada’s copyright notice-and-notice system, which was formalized in 2012 to allow rights holders to forward allegations of online copyright infringement to Internet users through their Internet service provider. The system was viewed as a win-win approach since it promised to deter infringement through education rather than legal threats.

Yet within hours of taking effect, anti-piracy companies began sending notices that included settlement demands backed by threats of litigation. The government advised the public that there was no requirement to settle, but the absence of regulations opened the door to widespread misuse. Mr. Bains now says the government will amend the Copyright Act to ensure settlement demands are excluded from the notice-and-notice process, thereby restoring the original intent of the system.

The IP strategy will also address misuse that arises from patent trolling and trademark squatting. Patent trolling refers to instances when companies that had no involvement in the creation or invention of a patent demand licences or other payments from legitimate companies by relying on dubious patents. Studies indicate that patent trolling has a negative affect on innovation and is a particularly big problem in the U.S., which tends to be more litigious than Canada.

The government plans to combat patent trolling by amending the Patent Act to create new minimum requirements for patent demand letters, which should discourage the sending of deceptive letters. The rules will also require that letters include minimum standards of information to better allow recipients to assess the merits of the claim. The government had been considering measures to address patent trolling for several years and the IP strategy provides an ideal mechanism for doing so.

Similarly, the government is planning to address a trademark misuse concern identified by experts when the law was last amended. Trademark squatting arises in instances where rights holders register but do not use their marks, potentially as a defensive mechanism to keep others from acquiring or using them. Mr. Bains plans to change the law to require trademark owners to use their marks within three years if they wish to enforce the rights associated with them.

The inclusion of anti-IP abuse rules within a broader package of IP strategy reforms points to the realization that over-protection of IP can be just as problematic as under-protection. While policy debates around intellectual property typically involve pressure to escalate IP protections and safeguards, the government has rightly recognized that misuse of IP rights can also have a significant chilling effect on innovation, leaving consumers and smaller innovative businesses caught in the crossfire.

6 Comments

  1. Apparently this sort of copyright protection abuse exists; I have no personal knowledge or experience of it.

    But I do know that Geist’s use of the term “dark side” to describe this points up a different problem, one you will never hear him talk about: the fact that a lot of copyright theft takes place on the dark web, or is facilitated by sites operating in very dark corners of the regular web.

    One rights-infringement site that is very popular among hipsters, for example, the kinds of people who wring their hands about Russian hacking and corporate conglomerates and data collection and invasion of privacy on the web, things which should indeed concern all of us, uses, in order to avoid prosecution, the same internet service provider, located on an island in the Indian Ocean, that is responsible for 75% of the world’s spam. That’s a lot of spam, and not all of it is just for counterfeit handbags.

    The pirated document site Sci-Hub, as is well known, hacks library systems, phishes for passwords and login credentials, etc. etc., and is probably run by Russian intelligence.

    Many popular movie and music pirate sites, once again with a huge hipster clientele, track their users with a ruthlessness worthy of the NSA. Their anonymous administrators brag that they can pinpoint a user’s location to within a city block. They record and store IP addresses. They trade information amongst themselves about bad apples in their systems who may be spying for rights holders and building prosecution cases. They ahve some of the most sophisticated surveillance systems around.

    None of this seems to concern the users of pirate sites, the kind of people who wail about tech companies and national security agencies and the like. Well folks, your friendly local pirate site is doing the same stuff, with even fewer checks, and even further from public scrutiny.

    And while we hear lots from the likes of Michael Geist, someone on the public payroll supposed to be devoted to informing the public and policy makers about issues around copyright, the digital world, etc etc., you’ll never see him devote some time and effort onto investigating the phenomena I’ve just mentioned above, preferring instead to blather about “dark practices” on the part of rights holders, which, it sounds like, could more accurately be described as over zealous legal action, and which pale beside the real dark practice of systematic intellectual property thieves.

  2. Kelly Manning says:

    I have received several demand emails for copyright infringement that never happened. There is a whole unfounded litigation industry around this practice. Do a web search on ACS law, Prenda Law, ceg-tek, Malibu Media, and others.

    A lot of these threats rely on victims be worried that someone may have hacked their WiFi. I don’t use WiFi or wireless, problem solved.

    Here is some USA based advice on “Defense Against the Dark Arts of Copyright Trolling”
    https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2933200

  3. Ken Chasse says:

    As high-lighted in its “Budget 2017” Fact Sheet, “Skills, Innovation and Middle Class Jobs, the federal government’s high profile creation of “Innovation Canada,” is intended to protect IP (intellectual property) and, “to help Canada realize its potential as a global leader in innovation,” and as part of that effort, to help the creation of “clusters” of innovating organizations such as Silicon Valley in California. Innovation Canada’s creation of the principles and practices for identifying, protecting, and monetizing IP, will be well served by placing them in the most authoritative texts possible to bring about their wide spread and frequent use and enforcement, which are National Standards of Canada. Therefore, because an important part of that project will be the creation of such national standards, the Standards Council of Canada issued an email message on April 10th, emphasizing how very important it will be in helping all organizations to engage in innovation. It states that the government will give the Council, “$14.4 million over five years to develop and advance standardization initiatives that will benefit Canadian innovators, enhance market access and create new middle class jobs.”
    One of the consequences of this federal government “IP and Innovation” project, (and supposedly, for preparation for the next election on Monday, October 21, 2019), has been the great pressure applied by federal government agencies to hurry the creation of a second edition of what is the most important and widely used of all National Standards of Canada, Electronic Records as Documentary Evidence CAN/CGSB-72.34-2017 (pdf). It provides the principles and practices for good electronic records management. Almost everything we do is evidenced by electronically produced records, and so is every working decision we make, and is made for us and about us. And, all such records can become evidence in legal proceedings and in providing legal services. Therefore enforcement of the use of this national standard is very necessary. Electronic records management systems if not well maintained, have a distinct probability of losing and destroying records and corrupting the data in records. The more complex a technology, the more ways it has of breaking down or otherwise performing inadequately, and therefore the more complex must be the requirements for its manufacture, use, and maintenance.
    However, because of that great pressure to complete the draft second edition within an unrealistic but unreasonably enforced deadline, and get it declared to be a published standard by the Standards Council, a very incompetent procedure was used by the organization responsible for the final draft, the Canadian General Standards Board (CGSB). And the Standards Council failed to deal with complaints as to the resulting errors in that draft and the faulty procedures that caused them. And because of the importance of this national standard, and the probability of causing substantial loss by relying upon it, CGSB and the Council have potentially greatly impaired their reputations and their ability to serve as an important part of the federal government’s innovation and IP initiative. That is additionally dangerous because the creation of the necessary future national standards that will have to be created for IP and all uses of information and data, will fall within the jurisdiction of both of these organizations.
    I was the Chair of the drafting committee of this 72.34-2017 national standard. I and the other senior and highly specialized lawyer responsible for its legal section had to resign part-way through the project because of the very improper procedures imposed upon the drafting committee by CGSB.
    I have set out in great detail, the full history of the creation of the 72.34-2017 national standard and the errors it contains, in this published text: Ken Chasse, “Innovation Canada, IP, and Dependence Upon the Standards Council of Canada” (SSRN, pdf.); at: https://ssrn.com/abstract=3107800 . And there is a shorter blog version, using the same title at: http://www.slaw.ca/2018/03/22/innovation-canada-ip-and-dependence-upon-the-standards-council-of-canada/ .
    That shocking history of standards-creation brings into question the competence and integrity of Canada’s process for creating national standards, and the accreditation by the Standards Council of CGSB as a standards development organization (an “SDO”; there are nine such accredited SDOs, each having its own, separate subject-matter jurisdiction). But the federal government has committed itself too far and too heavily to the Standards Council in support of its “IP strategy,” and to the need for the competent drafting and declaring of national standards to expect that it can successfully create the appearance of an impartial and independent inquiry into these events. Nonetheless, because of what is at stake and at risk, an independent, open, and formal inquiry is needed. Some good investigative journalism is required to bring that about.
    -Ken Chasse, J.D., LL.M., member of the Law Society of Ontario, and of the Law Society of British Columbia.

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  6. Kelly Manning says:

    Are Copyright Holders abusing notice and notice to get around Canadian anti-spam legislation? The 3 bogus violation notices sent by Irdeto about the an anime series, Bleach, all contained information about Irdeto’s pay per view web site. Technical incompetence in identifying illegal downloads, or a deliverate, cynical scheme to advertise a web site for a cancelled anime series.

    With the RIAA Copyright Trolling the suits against Apple Macintosh user were either technical incompetence or outright fraud. KaZaA only ran on computes with the Microsoft OS.

    What is the real motivation behind the Irdeto notices?

    1. to advertise a pay per view web site for a cancelled anime series, bypassing Canadian anti-spam legislation

    2. the classic copyright troll scam of frightening people and hoping that they pay up, a variation on the “CRA is about to arrest you” scam

    3. technical incompetence in identifying copyright abusers

    While Prenda Law actually identified some of the victims lured by their honeypot they never actually won a case in court. As one assessment put it “As per usual, Team Prenda throws a lot of crap at the wall, hoping something will stick. None of it does. ”

    https://www.techdirt.com/blog/?tag=spencer+merkel

    ‘Then Prenda lawyers launched a wave of subpoenas on bizarre anti-hacking claims, saying they needed to gather customer information from hundreds of ISPs to find Merkel’s “co-conspirators.” ‘

    https://arstechnica.com/tech-policy/2015/08/appeals-court-prenda-lawyer-who-drained-cash-from-his-law-firm-must-pay-up/

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