I have recently attended a great seminar on business licensing.
Indeed, licensing can be a great way to grow a business and widen one’s streams of passive income.
Licensing has an obvious advantage over franchising in that it imposes substantially less mandatory requirements over the licensor.
It may appear that licensing is some kind of franchising-lite.
Whether or not it is so, it is very important to keep one thing in mind.
By definition, a license is a permission to do something that no one would have the right to do without such permission. A license is not a right, it’s a permission.
The corollary from this definition is that for there to be a valid license, the license should cover something that you can legally stop others from doing. Just like it would be very difficult to enforce a license that allows someone to breathe in exchange for a 10% royalty, it would be difficult to enforce a license pursuant to which a business is licensing something that is readily available to the public without any restrictions.
Aside from properly documenting your intellectual property in the form of copyright, trademarks and patents, you should also take great care in keeping your secrets secret. If you fail to secure your confidential information, you may one day find yourself in a courtroom with a judge who would have little sympathy to your attempts to force a competitor pay you for something that you neglected to protect. Unless your IP is properly protected, you cannot license it out. Let me rephrase that. You may be able to license it out, but it would be difficult for you to enforce the terms of such license.
Intellectual property is an important (and sometimes, the most important) asset of your business. Whether or not your strategy involves licensing your business systems to others, you should always keep in mind that your actions have consequences.
If building business assets is a part of your strategy (and it should be), then having a meaningful IP strategy is a must!
The story of people registering domain names, user names, screen names and other internet names confusing with famous trademarks of others is as old as the internet itself.
Historically, ISPs and website operators had done very little to address rights and lawful interests of trademark owners, which resulted in massive litigation costs for the first plaintiffs who needed to reclaim their stake in .COM domain names.
In 1999, ICANN implemented the Uniform Dispute Resolution Policy that gave trademark owners a time- and cost- efficient way to deal with straightforward cases of cybersquatting. UDRP policy and rules, along with supplemental rules of several UDRP providers, such as WIPO and NAF, are sophisticated documents detailing various aspects of substance and procedure.
It may be hard to believe today but Twitter has only been around since 2006. With its revolutionary format, Twitter has now become the platform that allows over 500 million registered users to exchange over 340 million messages a day.
No wonder that it attracted those who wanted to capitalize on somebody else’s goodwill! With the prevalence of Twitter on the web, it was only a matter of time before a trademark owner would find itself unable to register a Twitter handle corresponding with its trademark.
In result, Twitter came up with its Trademark Policy to address such disputes.
Unlike UDRP, Twitter trademark policy is very brief and leaves a lot of discretion to Twitter. The gist of the policy is that if Twitter receives a “report of trademark policy violations from holders of federal or international trademark registrations”, Twitter will review the account and if Twitter finds that there is a clear intent to mislead others or if the account is in fact misleading, then Twitter may suspend the account and release the username for the trademark holder’s active use.
The policy clarifies that Twitter users should not use someone else’s trademarks as usernames, profile names, profile photos, header photos, background images, or otherwise create an association between their Twitter pages and comments and such trademarks. For fan pages, Twitter users are required to include a statement to distinguish their Twitter profile from the real company by adding a disclaimer in the 160-character bio, such as “Unofficial Account”, “Fan Account”, “Not affiliated with…”
The procedure for reporting trademark policy violations is very simple: the interested party must provide the following information: username of the reported account, the trademark owner’s company name, the trademark owner’s twitter account (if there is one), the trademark owner’s website, the trademark, trademark registration number and country of trademark registration.
Interestingly, trademark policy violations can only be sent from an email address of the company owning the trademark. For example, if Apple wanted to reclaim the @ipad username, the trademark policy violation request must have been sent from an firstname.lastname@example.org. In other words, if Apple wanted to have a lawyer submit the report, Apple would need to set the lawyer with an @apple.com email first.
Unlike the courts and UDRP, Twitter primarily deals with registered trademarks, not common law trademarks. UDRP specifically states that it applies to complainants who have “rights” in a trademark. Twitter trademark policy is a serious limitation to those trademark owners who rely on their unregistered trademarks. Although the policy makes it clear that “a federal or international trademark registration is required”, Twitter makes an exception for unregistered trademarks held by government agencies and non-profit organizations.
The trademark owner must describe confusion that is being created by unauthorized use of the trademark by the twitter handle.
Finally, the trademark owner should choose whether it desires to remove the violating account or transfer the trademarked username to the trademark owner. These two options are in line with UDRP, where the trademark owner may request cancellation of a domain name registration or its transfer to the trademark owner.
Interestingly, the format of the complaint is that of a “trademark policy violation”, not “trademark infringement” as such. This is done in the attempt to shield Twitter from having to resolve each and every dispute between trademark owners and twitter users.
Currently, Twitter usernames are less important for branding compared to domain names, which is probably the reason why there have not been very many court cases and serious disputes around Twitter user names. Time will tell if this is going to change.
Meanwhile, if you are a trademark owner, make sure you use Twitter internal policy if you see someone else use your trademark on their twitter profile.
If you are a Twitter user, make sure you don’t infringe upon trademark rights of others. Remember that just because Twitter has a policy that facilitates the transfer of usernames to trademark owners, does not mean that you cannot be sued for trademark infringement personally.
The new Canadian Copyright Act introduces a concept that is novel to world copyright laws. More unjustified exceptions are now recognized in respect of a “lesson”.
A “lesson” is defined as a “lesson, test or examination” (or a part of a lesson, test or examination), in or during which an educational institution or a person acting under its authority does what would be considered an infringement of copyright, but is permitted under one of the numerous limitations or exceptions.
In other words, these are the elements of the definition:
1. a work (or other subject-matter) must be used in or during a lesson, test or examination;
2. the work (or other subject-matter) must be used by an educational institution or a person under its authority;
3. the use of the work (or other subject-matter) must be an infringement of copyright (except for limitations or exceptions contained in the Act);
4. there must exist exceptions or limitations in the Act that would permit the use of the work (or other subject-matter).
In other words, nothing is a “lesson” unless it involves unauthorized use of a work (or other subject-matter) justified under an exception or a limitation. In the attempt to be overly inclusive, the legislator has created a catch 22: Section 30.01 sets out an exception that only applies in respect of a work (or other subject-matter) that by definition would be infringed by the educational institution if not for the fact that such use is somehow already “permitted under a limitation or exception under the Copyright Act.”
Here is the question, if the use is already excused or justified through a different exception or limitation, what is the added benefit of Section 30.01? On the other hand, would exceptions and limitations set out in the Section 30.01 count towards the “exceptions and limitations” referred to in the definition? Based on the rules of statutory interpretation, they shouldn’t. But again – if they don’t, what is the purpose of Section 30.01?
In my post on Section 29.4 of the Copyright Act, I already questioned the interrelationship of the amended s. 29.4 and the new s. 30.01. Section 29.4 is so broad that I cannot see why anyone would ever want to use s. 30.01.
Things get even more convoluted with subsection 30.01(2), which states that Section 30.01 does not apply so as to permit reproduction, conversion of non-dramatic works into dramatic works and conversion of dramatic works into non-dramatic works, if such use of the works would infringe copyright. Again, the definition of “lesson” already states that the use must be permitted through a limitation or exception under the Act. If no such limitation or exception exists, the “lesson, test or examination” during which the work is used would not be a “lesson” under the definition of Section 30.01. If it’s not a “lesson”, then s. 30.01(2) is redundant. On the other hand, if s. 30.01(2) is not redundant, then we run into the problem with the definition.
Subsequent subsections don’t make things any clearer.
Subsection (3) sets out that a fixation of a “lesson” for the purpose of its communication to the public by telecommunication for educational or training purposes is not an infringement of copyright. Again, if fixation and communication of a work included in a “lesson, test or examination” is not permitted under a limitation or exception under the Act, then the lesson, test or examination do not constitute a “lesson”. In this case, Section 30.01(3) would not apply. If such use of a work is already permitted, then there is hardly any additional benefit in restating that the permission is valid for the use of the work as part of the “lesson”. Moreover, if the use of a work is already permitted, there is no reason why educational institutions should consider themselves limited with the additional conditions set out in the follow-up provisions of Section 30.01.
Subsection (5) allows a student who has access to a “lesson” through telecommunication to reproduce it in order to watch it and listen to it at a more convenient time, but the student must destroy all copies not later than 30 days after the student received the final course evaluation.
Subsection (6) requires that the educational institution take reasonable measures to limit access to the “lesson” to students only and then destroy all fixations of a lesson 30 days after the students received their final course evaluation.
BOTTOM LINE: Besides incomprehensible wording of this Section 30.01, a larger question remains: WHY is it OK to use protected works in “lessons”, to fixate and to communicate the lessons containing works used without permission?
To me, this is a poorly drafted arbitrary decision based on an out-of-place compromise.
On December 4, 2012, I delivered an "Intellectual Property in Plain English" seminar to over 60 members of Vancouver Business Network.
Those who attended the seminar walked away with:
– 5 big ideas about intellectual property and the law in general that will answer 80% of all questions about IP;
– 5 reasons to register trademarks;
– 7 one-word shortcuts to instantly identify different types of intellectual property.
Below, you can watch highlights and testimonials from the seminar.
If you would like to see the whole seminar, please sign up in the form below.
More Cases Uploaded
Tags:CollectivismPhilosophySmall BusinessNew Copyright ActFair Dealing