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Michael Geist's Blog

CWTA Calls on Government to Use Spectrum Auction Proceeds to Pay for Lawful Access

The government may have killed lawful access, but the Canadian Wireless Telecommunications Association apparently thinks it will return and is urging the government to earmark revenues generated by the forthcoming spectrum auction to pay for it.  In an appearance before the Standing Committee on Industry on March 26th, CWTA President Bernard Lord told the committee that the government should use the proceeds to cover digital economy priorities including "lawful intercept requirements for telecommunication service providers."  As I reported last year, the telecom companies were working closely with the government on lawful access with their key priority being compensation for the costs associated with the requirements.
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Quebec Court Says No to eBay's Online Contract

Appeared in the Toronto Star on March 30, 2013 as Quebec Court Says No To eBay's Online Contract

Few things are more common on the Internet than the lengthy, largely incomprehensible, online contracts that are often buried at the bottom of web pages with a simple link to "terms". These agreements sometimes run dozens of pages if printed out and invariably transfer all responsibility and liability to the user, while selecting a jurisdiction clause that is advantageous to the website and inconvenient to most users.

Consumers agree to these contracts dozens of times each day (sometimes proactively by clicking that they agree and most other times by impliedly agreeing to the terms by using the website), but the enforceability of all the terms within the agreement remains an open question.

The law has removed most uncertainty about whether an electronic contract can be enforceable - it can - but ensuring that the form of the contract is valid does not mean that all of its provisions will be enforced by a court.  Last month, a Quebec court provided an important reminder that some provisions may not be enforced, as it rejected eBay's standard terms which require all disputes to be adjudicated in California.

The case involved an auction gone bad with the Montreal-based sellers seeking to hold eBay responsible. Two students had acquired a rare pair of Nike shoes produced for the National Basketball Association 2012 All-Star game. The shoes were listed for auction on eBay and quickly garnered bids that exceeded U.S.$50,000. Before the auction was concluded, however, eBay stopped the auction (the reasons have yet to be disclosed in court).

The two students sued the online auction giant in a Quebec court, arguing that it could assert jurisdiction over the matter since the sellers were located in the province. eBay countered by noting that though its terms of use agreement states that all disputes are governed by Ontario and Canadian laws, any litigation must occur in California.

The Quebec court was not impressed, noting that the eBay agreement was over six pages of dense text with "a large number of conditions and restrictions stacked on top of each other in language that is difficult to understand." The jurisdiction clause was located at the bottom of page five, leading the court to wryly conclude that for a user with very good eye sight and lots of patience and determination, they will find the provision stipulating California as the forum for disputes.

The court suggested that the choice of California appeared to be an attempt to dissuade potential litigants from proceeding with their action, noting that using Canadian law as the governing law but California courts as the jurisdiction for disputes was inserted to "prevent, deter, and void" any appeal against eBay.

Given the court's discomfort with the eBay agreement, it concluded that the California jurisdiction provision was "excessive and unreasonable" and therefore void. The decision allows the two students to continue their action against eBay in the Quebec courts.

The ruling runs counter to earlier Canadian cases that have generally granted considerable deference to freedom of contract and the ability to enforce somewhat onerous jurisdiction clauses.

For example, one of the first e-commerce cases in Canada involved a lawsuit against Microsoft, which at the time was offering Internet access services.  The lawsuit was launched in Ontario, but Microsoft's electronic user agreement included a provision stipulating the State of Washington as the jurisdiction to settle disputes.

An Ontario court upheld both the contract and the provision, warning in a 1999 decision that failure to enforce electronic contracts would "lead to chaos in the marketplace, render ineffectual electronic commerce and undermine the integrity of any agreement entered into through this medium."

Those concerns may have been valid when e-commerce was just getting started, but years later the Quebec decision suggests that e-commerce is also dependent upon fair contracts that grant a genuine ability to pursue legal action in the event of a dispute.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

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Policy Laundering Lies Behind Ottawa's Support for IP Treaties

Appeared in the Toronto Star on March 23, 2013 as Policy Laundering Lies Behind Ottawa's Support for Trade Treaties

Last week, the House of Commons Committee on Industry, Science and Technology released its long-awaited report on intellectual property in Canada. The report was the result of months of study with witnesses representing a wide range of industries from pharmaceuticals to universities to entertainment software all making the trip to Ottawa to provide the committee with their views on what works, what doesn't, and what needs reform.

While most of the recommendations are fairly innocuous - the committee identifies many issues for further study - one recommendation involves a classic case of policy laundering as the government has manufactured support for provisions found in two major proposed trade agreements that were not even raised by the witnesses that appeared before the committee. The report recommends:

that the Government of Canada (in order to support Canadian businesses on the global stage and ensure the administration of Canada's IP regime is internationally compatible and streamlined) ratify the following key international agreements: the Patent Law Treaty, the Madrid Protocol and Singapore Treaty for trade- marks, and the Hague Agreement for Industrial Designs.

The NDP picked up on the inclusion of the recommendations without any debate, discussion or actual study, noting in its minority report that

As the Committee heard no testimony on the Patent Law Treaty, the Madrid Protocol and Singapore Treaty for trade-marks, and Hague Agreement for Industrial Designs, New Democrat committee members are surprised by the inclusion of a recommendation regarding these treaties in the majority report. The Committee should seek more information before pronouncing on such treaties.

So why did the government representatives on the Industry committee include a recommendation to ratify four international treaties that were not discussed during the committee?

The answer likely lies in the Canada - EU Trade Agreement and the Trans-Pacific Partnership, the two prospective trade agreements that top the government's current trade agenda. According to leaked documents, the Canada - EU Trade Agreement includes provisions that require Canada to make all reasonable efforts to comply with the Singapore Treaty and the Patent Law Treaty as well as accede to the Madrid Protocol and the Hague Agreement.

There are similar requirements in the Trans Pacific Partnership as leaked documents indicate that it includes provisions that require countries to ratify or accede to the Madrid Protocol and the Singapore Treaty as well as make reasonable efforts to ratify or accede to the Patent Law Treaty and the Hague Agreement.

These treaties would require significant legal reforms in Canada.  In the case of the Singapore Treaty and the Madrid Protocol, the procedures associated with Canada's trademark laws would face an overhaul, which the Intellectual Property Institute of Canada has noted would benefit only a small number of trademark holders.

The other two treaties also create new procedural requirements, with the Hague Agreement for Industrial Designs establishing a system for registering industrial designs in multiple countries with a single application and the Patent Law Treaty seeking to harmonize formal procedures such as the requirements to obtain a filing date for a patent application, the form and content of a patent application, and representation.

These treaties might make sense for Canada, but it is hard to know without careful study. Instead, the committee has simply recommended their ratification - and the all costs associated with doing so - without any debate or analysis. That represents a case of policy laundering designed to fabricate a record of support for the four treaties. Should Canada reach agreement on CETA or the TPP, the government will presumably use the report to claim support for the treaties that did not really exist. 

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

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