Laws of .com

Volume IV, Issue 11: June 1, 2006

Record Industry Sues XM Satellite Over iPod-like Device

Amazon's "One Click" Patent Back Before U.S. Patent Office

Bank Makes Incorrect Assumptions About DNS Listings

Complainant Obtains Domain Name Transfer Based on Parent Company's Mark

Wi-LAN Files Patent Suit Against D-Link

WestJet's $15.5 Million Apology to Air Canada

The Co-operators Group Wins Domain Name Dispute Over "Cooperator.ca"

U.S. Veterans' Personal Information Compromised After Home Burglary

Global Sting Operation Targets Major Internet Fraud Schemes

Record Industry Sues XM Satellite Over iPod-like Device

The largest labels of the recording industry are suing XM Satellite Radio over its new “Inno” device, an iPod-like portable player that can record up to 50 hours of music, which went on sale several weeks ago. While the suit seeks $150,000 in damages for each song copied by XM Satellite’s customers using the Inno, it does so only from XM Satellite itself; it does not seek payments or sanctions directly from XM Satellite customers. XM Satellite says it plays 160,000 different songs every month.

The lawsuit brings to the forefront the application of existing, settled law to digital devices. XM Satellite claims that the Inno merely allow users to listen to and record the radio “just as the law has allowed for decades”, comparing its device to a high-tech videocassette recorder which consumers can legally use to record programs for personal use. The recording industry contends that the Inno is legally indistinguishable from other portable music players that work with downloading services such as the iPod, and as such, requires appropriate licenses.

The lawsuit and the differences may, however, merely relate to posturing between the parties, who are currently in negotiations regarding distribution licenses similar to the ones signed by XM Satellite’s chief rival Sirius Satellite Radio for a device similar to the Inno and Apple’s downloading service iTunes.

For additional information, visit:
http://www.siliconvalley.com/mld/siliconvalley/news/editorial/14593918.htm

Back to Headlines

Amazon's "One Click" Patent Back Before U.S. Patent Office

Amazon.com finds that it takes more than one click to navigate through the United States Patent and Trademark Office (USPTO) with its famous patent. At the request of a New Zealand individual, Peter Calveley, the USPTO has agreed to re-examine Amazon.com’s patent in light of a prior patent, and other material cited by Mr. Calveley. Mr. Calveley reports that he was motivated by an “annoyingly slow” book delivery from the online retailer.

Amazon.com’s “one click” patent is entitled, “Method and System for Placing a Purchase Order Via A Communications Network” and issued September 28, 1999. Calveley argues that an earlier patent, entitled “On-line Secured Financial Transaction System Through Electronic Media” filed June 7, 1996 and issued March 17, 1998 renders Amazon.com’s patent invalid for lack of novelty and obviousness. Specifically, certain claims set forth by Amazon.com are said to be disclosed in the earlier patent. The lengthy request for re-examination cites many other documents as well. The USPTO has concluded that a substantial new question of patentability affecting some of the claims has been raised by Mr. Calveley and has ordered the re-examination of the entire “one click” patent.

For Mr. Calveley’s blog, visit:
http://igdmlgd.blogspot.com/

For the USPTO re-examination file, visit:
http://tinyurl.com/n7foy

For additional information, visit:
http://www.msnbc.msn.com/id/12860657/

Back to Headlines

Bank Makes Incorrect Assumptions About DNS Listings

The Privacy Commissioner of Canada recently addressed a bank’s assumptions about its customers’ “do not solicit” (DNS) requests. The complainant asked the bank several times to stop marketing to him, but he continued to receive marketing calls nonetheless. He eventually initiated a complaint with the Privacy Commissioner. At about the same time, he contacted the bank again. The bank did not have a record of the complainant’s previous requests to be taken off the marketing lists, but in light of the latest request, they flagged his file as DNS. Once again, the complainant received further marketing calls from the bank.

During the Commissioner’s investigation, the bank explained its approach to DNS listings. The bank took the view that most customers who request a DNS designation do so only to prevent contact from telemarketers or bulk mail marketing programs. The bank assumed that such customers still wish to have their local branch contact them if an offer beneficial to them arises in circumstances that the bank believes may be specifically applicable to the customer.

The Commissioner disagreed with this assumption, and stated that when a customer withdraws consent to marketing the bank should assume that the customer does not wish to receive any sort of marketing at all. When a customer withdraws consent to marketing, the bank can inform the customer of the consequences of that decision but should not interpret the customer’s wishes according to the bank’s own needs.

The Commissioner found that the bank had used the complainant’s personal information without consent, contrary to PIPEDA, and therefore that the complaint was well founded. However, the bank was taking various steps to address the issue (for example, having a central DNS designation override all of its sales tools, and changing its scripting and training to ensure that marketing staff did not contact DNS customers). The Commissioner agreed with the bank that it would still be reasonable to contact DNS-designated customers to advise about GIC or mortgage renewals, or regarding periodic portfolio reviews. For these reasons, the Commissioner found that the complaint had been resolved.

For a copy of the Commissioner’s Findings, visit:
http://www.privcom.gc.ca/cf-dc/2005/323_20051222_e.asp

Back to Headlines

Complainant Obtains Domain Name Transfer Based on Parent Company's Mark

The Canadian Internet Registration Authority (“CIRA”) regulates “.ca” domain names, and users of “.ca” domain names agree by contract to have domain name disputes resolved before an arbitration panel. This panel renders a decision based on CIRA policies, rules and prior panel decisions.

In April, 2006 a one member panel dealt with a complainant seeking the transfer of a domain name (www.pre-paidlegalservicesinc.ca) when it did not own or use the mark in dispute. The difficult question facing the panel was that the mark in question was used as the U.S. parent company’s trade name. The test applied was whether the mark was confusingly similar to a mark in which the complainant had rights.

The complainant provides pre-paid legal services, and it is related to a U.S. based parent company that holds a trademark on “Pre-Paid Legal Services & Design”. This is a U.S. trademark that neither the complainant nor its parent company had registered in Canada.

The panel held that the use of the trade name of an entity other than the complainant is not fatal to the complaint because there is no requirement that the mark be used in Canada by the complainant. The requirement is simply that the mark be used in Canada “by a person … for the purpose of distinguishing the wares, services or business of that person”.

The complainant also adduced some evidence in the form of news stories that the registrant was wanted in the U.S. for fraudulently selling pre-paid legal services, as well as a complaint to the U.S. parent company about the registrant holding himself out as a broker of Pre-Paid Legal Services. The domain name resolved to a site offering pre-paid legal services.

The domain name was ordered transferred on the basis that: the complainant had rights in the mark (which is the name of the complainant’s U.S. parent); the domain name is confusingly similar to the mark; the registrant had no legitimate interest in the mark; and that he registered the mark in bad faith.

For a copy of the decision, visit:
http://www.cira.ca/en/dpr-decisions/00056-pre-paidlegalservicesinc.ca.pdf

Back to Headlines

Wi-LAN Files Patent Suit Against D-Link

Wi-LAN Technologies Corp., a wholly owned subsidiary of Wi-LAN Inc., has filed and served a lawsuit against D-Link Canada Inc. in the Federal Court of Canada for infringement of Wi-LAN's Canadian patent 2,064,975 for WODFM (Wideband Orthogonal Frequency Multiplexing). Also named in the suit is D-Link's US subsidiary D-Link Systems Inc. Wi-LAN claims "all devices incorporating the IEEE802.11a/g standards utilize Wi-LAN's WOFDM patents."

This suit follows a corporate update released May 15, 2006, where Wi-LAN announced it is entering the final stage of becoming a pure IP litigation company and reducing its employee count to seven. The following day, Wi-LAN also announced the hiring of James (Jim) Skippen, formerly head of patent licensing for MOSAID Technologies, as its new President and Chief Executive Officer, effective June 20, 2006.

For additional information, visit:
http://www.techfinance.ca/m-topnews+news+tnid-994-tnd-20060516.html

Back to Headlines

WestJet's $15.5 Million Apology to Air Canada

In a joint announcement released this past Monday by WestJet and Air Canada, WestJet “unreservedly apologize[d]” to Air Canada for downloading “detailed and commercially sensitive information without authorization or consent from Air Canada”. As part of the settlement, WestJet has agreed to pay Air Canada’s investigation and litigation costs of $5.5 million as well as make donations to children’s charities across the country in the amount of $10 million.

The settlement brings to a close one of the highest profile corporate-espionage cases ever in Canada. In its $220-million lawsuit filed last year against WestJet, Air Canada had alleged that WestJet had wrongfully used the personal logon information of a former Air Canada employee, who had been hired by WestJet, to access a password protected area of Air Canada’s website to obtain confidential information. The suit alleged that the information obtained identified Air Canada’s most profitable flights and times and allowed WestJet to plan its expansion into new routes and adopt competitive pricing strategies. In the joint announcement, WestJet admitted that it had engaged in such a practice “with the knowledge and direction of the highest management levels” and accepted “full responsibility for such misconduct”.

Air Canada has accepted WestJet’s apology as part of the settlement. Although the announcement indicated that the charitable donation would be in the names of both parties, the carriers, however, did not indicate to which party the tax benefits of the donations would accrue.

For a copy of the joint announcement, visit:
http://cnrp.ccnmatthews.com/client/westjet/headlinesen.jsp?year=current

For additional information, visit:
http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1148899686065&call_pageid=968350072197&col=969048863851

Back to Headlines

The Co-operators Group Wins Domain Name Dispute Over "Cooperator.ca"

The Co-operators Group Ltd. (the “Co-operators”) was recently successful in having the domain name “cooperator.ca” transferred to it through a complaint under the Canadian Internet Registration Authority Domain Name Dispute Resolution Policy (the “Policy”). The complaint was submitted to the British Columbia International Commercial Arbitration Centre (the “BCICAC”).

The panel appointed under the Policy by the BCICAC had no trouble finding in favour of the Co-operators on the three grounds required to successfully prove the complaint: that the domain name was confusingly similar to the Co-operators’ trade mark, the registration of the domain name was made in bad faith and the registrant, Artbravo Inc., had no legitimate interest in the domain name. Key to each of these findings was evidence submitted by the Co-operators that the registrant had used the domain name to provide links to insurance services and that the registrant had a pattern of registering domain names which correspond to the trade marks of third parties.

In an interesting dissent on the appropriate remedy, panelist David Allesbrook felt that cancellation of the registration was more appropriate than transfer of the registration to the Co-operators. Mr. Allesbrook felt that the domain name was a generic term capable of being used innocently by a third party and that there was a public interest in having as large a pool as possible of available trade marks and domain names.

For a copy of the decision, visit:
http://www.cira.ca/en/dpr-decisions/00055-cooperator.ca.pdf

Back to Headlines

U.S. Veterans' Personal Information Compromised After Home Burglary

A recent report indicates that an electronic data file containing personal information of up to 26.5 million U.S. veterans was taken from the home of a U.S. Veterans Affairs employee. Representatives of the Department of Veterans Affairs explain that the data file contains the names, birth dates, Social Security numbers, and possibly disability ratings of veterans discharged after 1975 and some of their spouses, as well as some veterans discharged before 1975 who submitted a claim for benefits. The report states that the Veterans Affairs employee in possession of the data file took the information home, without authorization, to work on a project, and that the burglars were likely unaware of the sensitive nature of the property taken. Nevertheless, experts observe that this theft represents the largest unauthorized disclosure ever of Social Security data, and exposes the veterans affected to the risk of credit card fraud.

For a copy the report, visit:
http://tinyurl.com/fwxov

Back to Headlines

Global Sting Operation Targets Major Internet Fraud Schemes

Law enforcement officials in several countries, including Canada, have mounted an international effort to disrupt criminal organizations operating major fraud schemes, primarily by means of the Internet. The U.S. led effort, dubbed Operation Global Con, has resulted in the arrest of 565 people in five countries.

A number of different schemes have been targeted, including sweepstakes offers, investment pyramid funds, Nigerian letter fraud and various phishing schemes used to obtain personal data. The organizations behind these schemes operate all over the world, but prey primarily on U.S. Internet users.

The Nigerian letter fraud scheme is a recent trend whereby victims receive letters or emails claiming to be from Nigerian landowners or government officials who offer the opportunity to receive millions of dollars which they claim they are trying to move out of the country.

For additional information visit:
http://abcnews.go.com/Business/story?id=1996595&page=1

Back to Headlines