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Prof. Pina D’Agostino is the Founder and Director of IP Osgoode, the IP Intensive Program, and the IP Innovation Clinic, the Founder and Editor-in-Chief of the IPilogue, the Deputy Editor of the Intellectual Property Journal, and an Associate Professor at Osgoode Hall Law School. This article features contributions from Ryan Wong (IP Osgoode & IP Innovation Clinic Alumnus), Sabrina Macklai (IPilogue Senior Editor), Tianchu Gao (IPilogue Writer), and Ashley Moniz (IPilogue Managing Editor).

2021 was an exciting year for the IPilogue. Our hard-working students and community members published more than twice as many articles than in 2020 and the most articles in a calendar year since 2011. This sharp increase helped us stay up to date with some of the biggest topics shaking up intellectual property: from , to ; and from growing investments in and , to IP registrars around the world grappling with whether to acknowledge Ìęas an inventor or artist. This article summarizes the top developments reported on our blog and in patents, trademarks, and copyright law in 2021. For a review of Privacy legislation in Canada, check out .

Top 10 Most Read IPilogue Articles Published in 2021

1. by Sabrina Macklai & Emily Chow
2. by Prof. David Vaver
3. by Claire Wortsman
4. By Claire Wortsman
5. by Natalie Bravo
6. by Prof. Giuseppina D’Agostino
7. by Bonnie Hassanzadeh
8. By Meena Alnajar
9. by Prof. David Vaver
10. by Bonnie Hassanzadeh

Introducing the College of Patent Agents & Trademark Agents

On , the came into force. The Act established the (‘’), an independent public interest regulator of patent and trademark agents in Canada. The purpose of the College is “to enhance the public’s ability to secure the rights provided under the and the .” The College’s responsibilities include maintaining professional competencies and ethics, issuing licences, collecting fees, and administering certification exams. This development marks a key milestone for the profession and for Canada’s . Though still in its infancy, the College has been criticized for and its , which may impose an additional fee on lawyer agents. It remains to be seen how influential the College is on the profession as it is expected to be fully operational within the next two years.

Patents

Overbreadth as an Independent Ground of Invalidity

On July 28, 2021, the Federal Court of Appeal confirmed overbreadth as a standalone attack on patent validity: . In this case, the appellants argued that there is no statutory basis for overbreadth as a ground for invalidity. The Federal Court of Appeal disagreed and found that overbreadth can be supported by a combination of sections 27(3) and 27(4) of the Patent Act. Case law has often overlapped overbreadth with other grounds of invalidity such as obviousness, anticipation, and inutility.Ìę

First Time Interpreting Patent Agent Privilege

Similar to solicitor-client privilege, patent agent privilege was introduced by section 16.1 of the Patent Act on June 24, 2016. The first case on patent agent privilege was decided this year: In this decision, the Federal Court provided some helpful commentary and analysis on the application and limitations of patent agent privilege.Ìę

Patent Prosecution History Now Admissible as Evidence

In 2018, section 53.1 of the Patent Act was added to make patent prosecution history admissible as evidence in patent proceedings. This was a significant development as the Supreme Court of Canada had expressly rejected the idea and stated that admitting patent prosecution history “would undermine the public notice function of the claims, and increase uncertainty as well as fuelling the already overheated engines of patent litigation” (Free World Trust v Électro SantĂ© Inc., 2000 SCC 66 at para. 66). Three subsequent Federal Court of Appeal decisions developed this provision further: ; ; and .Ìę

Continued Debates over AI as an Inventor

Around the world, patent registrars grappled with patent applications that credit artificial intelligence software as the inventor. Dr. Stephen Thaler’s “DABUS” (Device for Autonomous Bootstrapping of Unified Sentience) applied for patents around the world for its interlocking food containers. DABUS was granted patents in Australia and South Africa, with . In line with the and the , the disagreed, stating that absent express intention from Congress, the term “individual” in their statutory definition of “inventor” . The Supreme Court of Canada last considered the definition of "inventor" in 2002, but has yet to consider whether it would include non-human entities.

Trademark Law

Parody in Trademarks is No Joke

In , the Federal Court reaffirmed that parody is not a defence against trademark violation. Unlike the 2020 decision ), where the Federal Court failed to find the marks confusing, Justice McHaffie held there was a likelihood of confusion and passing off. This was based partly on the similarity of the trademarks and the overlap of the goods (both offering baked goods). However, even if the nature of the parties’ trades differ, trademark owners may still find recourse against spoofed versions of their marks through claiming depreciation of goodwill under section 22 of the . Here, the Court found goodwill in Subway’s trademarks, which was damaged by the nature of Budway’s products, as contrary to Subway’s “healthy and active” lifestyle promotion. With damages amounting to $40,000, it is clear the courts are unamused by parody in trademarks.

The Road Less Travelled Cannot be Trademarked

Like most countries, Canada bars the registration of “clearly descriptive” trademarks to prevent applicants from monopolizing words that merely describe the goods or services at hand. For this reason, marks consisting of are typically unregistrable. In , the Federal Court clarified when such marks might be protected. Hidden Bench and Locust Lane are two wineries operating on the same little road, “Locust Lane”. Although the Federal Court agreed that Hidden Bench met the threshold for a valid common law trademark over “Locust Lane”, they ultimately held that the mark, as clearly describing the goods and services’ place of origin, lacked both inherent and acquired distinctiveness. Therefore, Hidden Bench could not establish the necessary goodwill for a passing off claim. Only descriptive marks that have acquired a “secondary meaning” through use may warrant protection.

CIPO Addresses the Application Backlog

While filing trademarks is important for brand protection, the examination stage can take . In May, the Canadian Intellectual Property Office (CIPO) new measures to address the application backlog. Trademark owners may now file requests to expedite their examination where the registration of their mark is necessary for special circumstances such as if a Canadian court action involving the mark is expected or underway or if the goods or services are aimed at preventing, diagnosing, treating, or curing COVID-19. If accepted, the examination will take place within two weeks. The examination is also automatically expedited by approximately 6-10 months when the goods and services in the application are listed in CIPO’s . Though it is too early to assess the effect of these changes on mitigating the “”, the backlog of CIPO’s unexamined trademark applications appears to have as of December 13, 2021.

Push to Register Non-French Trademarks for Use in Quebec

Among the controversies associated with Quebec’s proposed Bill 96, , the bill stipulates new requirements for trademark owners operating in Quebec. Currently, under Quebec’s French-language laws, both registered and unregistered (i.e., common law) trademarks recognized under the may appear on public signs, posters, and commercial advertising in Quebec, in languages exclusively other than French. If enacted, Bill 96 would permit only registered non-French trademarks to appear on public signage, provided there is no corresponding registered French version of the mark. The Coalition Avenir Quebec government tabled Bill 96 on May 13, 2021, and Quebec’s National Assembly last examined it on December 10. Some iteration of the bill will likely become law by the end of this year. But even if it fails to pass, businesses relying on common law trademarks would be wise to try to register them, given the many that registration provides.Ìę

Copyright Law

In 2021, the Federal Court and Federal Court of Appeal heard 57 copyright infringement proceedings, approximately of all IP-related litigations at these levels.

Developments in Fair Dealing

The Copyright Act’s section 29 fair dealing provision, which allows for certain uses of copyright-protected materials, remained a central issue. affirmed that fair dealing for the purpose of news reporting (section 29.2 of the Act) must provide attribution, mentioning both the source and the name of the author. An indirect reference to the author accessible through “minimum research” is insufficient. As such, the Federal Court of Appeal rejected Trend Hunter’s argument that hyperlinking to the source article where Stross was credited was sufficient to meet the second requirement. The Court also declined to find fair dealing under s. 29 more broadly, considering that Trend Hunter’s dealing was commercial in nature, reproduced Stross’ work in its entirety, and that alternatives were available.

Fair dealing was once again at issue in , where the Federal Court held that the Conservative Party’s use of the CBC’s news footage of Liberal Party Leader and Prime Minister Justin Trudeau during their 2019 election campaign did not infringe CBC’s copyright. The court undertook a large and liberal interpretation of fair dealing, finding that the Conservative Party’s use of CBC footage was for the purpose of criticism under s. 29.1.

żìČ„ÊÓÆ” achieved a in the copyright tariff dispute with the Canadian Copyright Licensing Agency (“Access Copyright”) in In a unanimous decision, the Supreme Court ruled that the interim tariff approved by the Copyright Board is not mandatory. Users can choose whether to accept licences or pursue alternative methods to lawfully copy works. Notably, this marked Justice Rosalie Abella’s final decision before her retirement from the Supreme Court of Canada. Throughout her tenure, and her judgement here provided helpful obiter regarding fair dealing as integral to users’ rights.

Even Fake Facts are Not Copyrightable

involves the alleged copyright infringement of the famous true-crime story The Black Donnellys. The book had always been presented and accepted as “.” The Federal Court ruled that “an author who publishes what is said to be a nonfiction historical account cannot later claim the account is actually fictional to avoid the principle that there is no copyright in facts.” Given today’s popularity of the phrase “based on a true story”, this ruling is a that there is no copyright in facts, even if they are later found to be untrue.

Copyright in Evolving Content Transmission

In , the Federal Court found the defendant liable for copyright infringement in its provision of pre-loaded set-top boxes and internet protocol television (IPTV) services and awarded the plaintiff nearly $30 million in damages. These services made copyrighted works owned by the plaintiff available to the public without the plaintiff’s permission. This decision marks the first time The court dealt with a similar issue in ). As IPTV is growing increasingly popular across the globe, its poses a challenge in Canada.

Availability of Reverse Class Actions for Copyright Infringement Claims

The first of its kind in Canada, the Federal Court of Appeal in affirmed that reverse class actions may be pursued in connection with copyright infringement claims. Though the matter was sent back to the Federal Court for further consideration, this judgement may encourage and enable mass copyright enforcement in the future, especially in our digital age where copyright infringement is more commonplace.

Public Consultations Ahead of 2022’s Copyright Reform

As part of the (CUSMA), which came into force on July 1, 2020, Canada has until the end of 2022 to implement numerous changes to their domestic copyright laws; most notably, extending the general term of copyright protection from . In light of the upcoming legislative amendments, the Government of Canada hosted three public copyright consultations in 2021:

• ;
• ; and

With the consultations now closed, it will be interesting to see how Canadian copyright laws will change in 2022 to accord not only with international obligations but our ever evolving digital world and public attitudes surrounding copyright laws.

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Emily Prieur is an IPilogue Writer and a 3L JD Candidate at Queen’s University Faculty of Law. This article was originally written as part of the IPilogue’s annual Year in Review but has instead been published as a standalone article.

2021 was a transformational year for Canadian privacy legislation. Following the changes made to the , several provinces amended their privacy legislation to protect their constituents’ interests. The private sector may be less welcoming to changes in many provinces which expose companies to . On the flip side, these proposed legislative changes will strengthen the privacy of Canadians in their everyday lives.

Provincial Legislative Changes

Quebec’s Bill 64 Passes Royal AssentÌę

The most significant development in privacy legislation is Quebec’s , An Act to modernize legislative provisions as regards the protection of personal information, which received royal assent on September 22, 2021. This legislation is significant because of its effects on the private sector. Starting September 2022, private sector organizations must inform the privacy regulator following any breach to compromised personal information that presents a “serious risk of injury” to affected individuals. To determine if there was a serious risk of injury to affected individuals, the province turns to the factors outlined in the “real risk of serious harm” section of the Federal Personal Information Protection and Electronic Documents Act (“PIPEDA”). As , the gradual implementation of Bill 64 allows organizations the opportunity to update their processes and procedures to ensure compliance before September 2022. The Quebec legislation also takes inspiration from the European Union's General Data Protection Regulation (“G¶Ù±Êžé”), which has been touted as the “” privacy regime because of its strict privacy standards and its partiality towards consumers.

The omnibus bill included such as changes to company websites, assignment of a Privacy Officer, completion of Privacy Impact Assessments, and requirements for consent, individual rights, and automated decision making. To date, the analysis of the legislation compares the provisions to the European GDPR.

Companies operating in Quebec are now required to publish their company privacy policies on their websites. Such privacy policies must describe how companies plan to use personal information.

In the event of privacy infringements that violate individuals’ private information, individuals will now have recourse through administrative monetary penalties, penal offenses, and private rights of action.

Finally, similarly to the GDPR, Quebec introduced consent requirements for collecting personal information, including express consent before using sensitive information and parental consent for minors under the age of 14.Ìę

Ontario Welcomes Consultations and Proposes Changes

Under the leadership of Patricia Kosseim, the Office of the Privacy Commissioner pursued their goal of passing an equivalent piece of legislation in 2021. In response to an op-ed piece that argued against provincial legislation in fear of redundancy and duplication, Kosseim recently regarding the potential for new provincial legislation to “fill in the gaps” of what Federal privacy legislation cannot accomplish.

In keeping with Kosseim’s motivation to strengthen privacy laws in Ontario, the Government of Ontario released a along with calls for consultation in June 2021. The White Paper, titled “Modernizing Privacy in Ontario,” set out several proposals the Ministry is considering to strengthen privacy protection for Ontarians. To strengthen such protections, the Ministry has proposed making privacy a fundamental right in Ontario. Ontario has also included suggestions to protect youth privacy online, regulate automated decision-making, and require more informed consent and data transparency from private corporations.

The Ministry allowed the public to provide comments and feedback until August 2021. The Office of the Privacy Commissioner applauded the provincial government for taking a “” with its proposal.

BC’s PIPA Committee Releases their Final Report

The British Columbia Legislative Assembly also created a special committee to review the British Columbia (“PIPA BC”) in February 2020. The objective of this committee was to publish a report proposing amendments to PIPA BC, which the committee completed in December of 2021. In the , the committee suggested aligning PIPA BC with PIPEDA and Europe’s GDPR. Like the recently passed Quebec legislation, the committee also suggested mandatory breach notifications if a breach surpasses the “real risk of significant harm” threshold as established in PIPEDA. The committee also recommended broadening the definition of personal information to address the potential issue of de-identification. Finally, the committee proposed that the Office of the Information Privacy Commissioner have greater enforcement powers.

Federal Legislative Changes

The Federal Office of the Privacy Commissioner (“°ż±Ê°ä”) did not introduce any new legislation in 2021. The Office was engaged in issues surrounding as well privacy issues resulting from the COVID-19 pandemic, including privacy with respect to and the rise in reliance on video teleconferencing platforms like Zoom and Microsoft Teams. The Canadian OPC, along with privacy authorities in Australia, Gibraltar, Hong Kong SAR, China, Switzerland, and the United Kingdom, to the videoconferencing companies regarding their rapid expansion during the pandemic to query and confirm that these technology companies were using appropriate privacy safeguards. The letter led to a series of video calls between the signatories and representatives from the companies. Finally, the signatories and suggestions to improve privacy going forward. Among the suggestions were the implementation of end-to-end encryption, the identification of secondary use data (as well as an opt-out system), and the option for users to choose where their data is stored.

Conclusion

New and amended privacy legislation continues to develop in Canada and worldwide.ÌęFollow the IPilogue and subscribe to our newsletter, the IPIGRAM, for any important legislative changes that emerge in 2022.

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On September 22, 2021, Quebec’s major privacy reform bill,ÌęAn ActÌęto modernize legislative provisions as regards the protection of personal informationÌę(Bill 64), receivedÌęÌęafter being adopted by the Quebec National Assembly the day before.

Bill 64 is set to dramatically change Quebec’s current framework for the protection of personal information by amending existing legislation to impose new obligations on regulated private and public sector entities, as previously reported by the E-TIPSÂź NewsletterÌę. By passing Bill 64, Quebec becomes one of the first Canadian jurisdictions to introduce such a substantial privacy overhaul and likely will lead the trend across Canada, with provinces like Ontario currently considering updating its own privacy regime.

The adopted amendments will not take immediate effect, with most of Bill 64’s provisions set to come into force on September 22, 2023 and a few provisions coming into force a year earlier, on September 22, 2022. Those provisions that will become law on September 22, 2022 include new breach notification requirements that will mandate private sector organizations to notify impacted individuals and the Commission d’accĂšs Ă  l’information of cybersecurity incidents. The gradual implementation of Bill 64 offers regulated entities the opportunity to update their operations and systems to ensure compliance with the province’s new privacy landscape. Ìę

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Claire Wortsman is an IPilogue Writer and a 2L JD Candidate at Osgoode Hall Law School.

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In May 2021, of the Centre for Business Research at the Cambridge Judge Business School published a proposing the abolition of the UK’s £1.1 billion per year Patent Box scheme. The UK Patent Box’s so-called “costly failure” may serve as a valuable lesson for Canada.

ł§ČčČő°ìČčłÙłŠłó±đ·ÉČčČÔ’s offers eligible corporations a lower corporate tax rate of 6%. Quebec has an that reduces the corporate tax rate from 11.5% to 2% on patent royalties and up to 75% of profits from other specified forms of IP-related income, provided that the taxpayer has carried out research and development (R&D) in Quebec and that the IP being commercialized results, in whole or in part, from R&D carried out in Quebec. Over the years, there has been that other provinces may follow suit. There have even been for the federal government to adopt a comparable policy.

A Patent Box aims to encourage the commercialization of intellectual property within a nation’s borders. In the UK, eligible profits derived from intellectual property are taxed a . Large companies, especially those in the finance and insurance sectors, are the primary beneficiaries of this policy. According to Connell, there is no evidence that the Patent Box benefited the UK economy since it became fully operational in 2017.

By reducing corporate tax on profits derived from UK innovations, as well as spending an estimated £7.3 billion annually on R&D tax credits, the UK government hoped to fuel R&D within its borders. Instead, UK business spending on R&D conducted outside of the UK has roughly doubled since the introduction of its Patent Box. Connell proposes a policy mix to address the UK’s declining trade balance in business R&D funding. Among other policies, Connell suggests abolishing the Patent Box, restricting R&D tax credits to UK expenditure, restricting R&D claims to business enterprise expenditure on R&D (BERD), and taking steps to reduce fraud and error in R&D tax credit claims.

Two UK based companies, Solexa and Cambridge Silicon Radio (CSR), were acquired by San Diego based multinational corporations, and respectively. Connell used these acquired companies to demonstrate that the scale of the Patent Box and R&D tax credit subsidies is not always reflected in companies’ R&D footprint in the UK. Despite Illumina receiving $39.6m in Patent Box receipts in 2019 and Qualcomm Technologies International Ltd (QTI, CSR’s new name) receiving over $24m in combined Patent Box subsidies and R&D tax credits that same year, neither was required to commit significant additional commercialization activities as per the Patent Box policy objectives. Although Illumina Inc’s global R&D spending increased by 126% to $623m in five years, their R&D tax credit receipts reflecting their R&D operations based in the UK remained a modest $1.5m. Qualcomm’s R&D operations based in the UK were similarly modest, as QTI reduced their employee head count from 783 to 692 between 2015 and 2019, with 67 of those laid off involved in R&D.

In Connell’s ranking of total direct and indirect tax support for R&D as a percentage of GDP by country, Canada ranks 8^th at just over 0.2% after France, Russia, the UK, South Korea, Austria, Belgium, and Italy, but ahead of the U.S., OECD, Netherlands, EU, Ireland, Japan, Czech Republic, and China. Canada and Japan appear to be the only countries with subnational tax support for BERD. Connell’s report demonstrates that the magnitude of tax support for R&D does not necessarily determine a country’s R&D footprint, yet it can be tailored properly to encourage growth.

Quebec’s IP box is the first of its kind in North America. Although Quebec has had a Patent Box since 2016, its 2020-2021 announced a shift from the Deduction for Innovative Manufacturing Corporations (DIMC) to the Incentive Deduction for the Commercialization of Innovations (IDCI). Perhaps Quebec’s newly evolved Patent Box will foster R&D within Quebec and stand in contrast to the UK’s failure. Or perhaps it will similarly fail to generate results. Either way, it will likely have important consequences for future Canadian IP taxation policies, at both the provincial and federal levels. Ìę

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Walmart, Costco, Best Buy, Gap, Old Navy and Guess have against the Quebec government in response to fines issued by the (OQLF). The fines were issued pursuant to the (hereby referred to as the Charter) – a piece of Quebec legislation designed to promote the use of French in everyday life for its residents. The fines for contravening any provision in the Charter can range from $1500 to $20000 – a hefty sum that can be doubled for subsequent offences (Section 205 of the Charter) and can result in the revocation of a company’s “francization certificate” (a designation given by the OQLF entitling the company to certain provincial tax benefits and to enter into contracts with the Quebec government).

The OQLF stated that these companies were contravening Section 63 of the Charter which requires businesses operating in Quebec to have French names. Alternatively, companies could include a descriptive slogan or line in French in order to comply with this requirement. While a number of businesses operating in Quebec have complied with the Charter by renaming themselves completely (such as KFC – known as PFK in Quebec) or by adding French to their signage (Starbucks is known as CafĂ© Starbucks Coffee), the 6 retailers listed above have refused to do so and have instead taken the issue to the courts to decide.

The fines come following done by the OQLF earlier this year, in which that they would “initiate other steps against businesses that refuse to post their trade name in compliance with the Charter [of the French Language].” Previous to these recent fines, the OQLF rarely went after trade names and much of the case will likely turn on the interpretation of the Quebec Regulation Respecting the Language of Commerce and Business (the Regulation). Section 25(4) of the Regulation provides that “a recognized trade-mark within the meaning of the Trade-arks Act” can be shown on public signs, posters and commercial advertising exclusively in a language other than French, thereby being an exception from Section 63 of the Charter.

However, there has been some argument over whether a trade name – the name used by a business for commercial purposes – can be considered to be included in the reference to “trade-mark” in the Regulation. As quoted by the Quebec Superior Court in (Procureur gĂ©nĂ©ral), author Harold Fox (in The Canadian Law of Trade Marks and Unfair Competition) describes the differences and interactions between the two concepts as:

"The distinction between trade names and trade marks lies mainly in the fact that a trade-mark is used in association with vendible commodities or services while a trade name is more properly used as applied to the goodwill of a business
 But it must be remembered that trade names are often used in association with vendible commodities and services and that trade-marks, just as much as trade names, are a constituent part of the goodwill of a business."

As some of these countries operate on an international scale, it is easy to understand why they are so resistant to some of the provisions that are now being strictly enforced by the OQLF in Quebec. The trade name of these companies and their associated logos are very closely related to the products and services that they provide to customers, and therefore, the goodwill that those generate toward the company itself. While it may seem fairly innocuous for Walmart to alter their signs to say “Le Magasin Walmart” (a possible compliant alteration), the costs of such a change could, in actuality, be quite large. These corporations spend massive amounts of money to design logos to attract customers and such a change could interfere with the look and feel of the chosen branding. There is no evidence that foreign countries have forced big name retailers to alter their signage in order to fit with the culture; should the Quebec government be so demanding of these corporations to change for such a relatively small market?

On the other side of the coin is the cultural sustainability that the OQLF and the Charter are attempting to maintain. French culture has been a defining point for Canadian culture and history – a fact recognized and referred to in many Supreme Court decisions. Should this not have any bearing on how these large companies do business in Quebec as a francophone province, if at the very least out of respect for the cultural heritage of our nation?

As the issues at stake are important to the operation of business in Canada and related to our French-Canadian culture and heritage, it is likely that the trial decision will be appealed. Regardless of the outcome at the end of the proceedings, will the businesses be left wondering if the money spent litigating these issues would have been better spent on redesigning their corporate branding? Only time will tell.

Adam Del Gobbo is a JD Candidate at Osgoode Hall Law School.

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