For the London Free Press – March 8, 2010

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U.S. courts may have to decide if a teen’s parody of a popular clothing line is an infringement

The North Face Apparel Co., more commonly known as The North Face, recently filed suit against Jimmy Winkelmann, a 19-year old high school student and his small Missouri clothing company called The South Butt.

North Face’s statement of claim alleges trademark infringement and dilution, among other claims.

North Face sells athletic apparel and gear for runners, rock climbers, snowboarders and others. South Butt sells jackets, T-shirts and other apparel “approved for relaxation purposes only.”

Winkelmann says his intent was not to rip off the North Face, but to offer consumers an alternative.

He came up with the South Butt idea to mock North Face fleece jackets worn by the popular crowd at his school.

In response to North Face’s tagline, “Never stop exploring”, South Butt adopted “Never stop relaxing.”

The North Face’s legal counsel sent Winkelmann a cease and desist letter in August 2009, requesting that he stop using the South Butt name and logo and halt all sales, production and promotion of South Butt products.

According to North Face, the two logos are so similar as to possibly cause “consumer confusion as to the source, sponsorship or affiliation of particular promotions and services that could dilute or tarnish the distinctive quality of the famous and distinctive marks.”

Winkelmann recently filed a trademark application for the South Butt, which the North Face legal counsel also asked him to withdraw.

In response, Winkelmann’s counsel — a friend of Winkelmann’s father, who apparently agreed to represent the teen in exchange for a good bottle of red wine — filed a somewhat irreverent defence.

Mr. Watson, Winkelmann’s legal counsel, stated “the sense of parody employed by Winkelmann within the context of his South Butt undertakings clearly demonstrate a respectful, if not faltering ‘anti-North Face’ posture designed in all respects to distinguish itself from any and all North Face products.”

The defence points out that, to emphasize its position that the marks are unlikely to confuse, the defendant added this to its website: “We are not in any fashion related to nor do we want to be confused with the North Face Apparel Corp. or its products sold under ‘the North Face’ brand. If you are unable to discern the difference between a face and a butt, we encourage you to buy North Face products.”

Unless it is settled, the case will ultimately be decided on the technicalities of U.S. trademark law.

Since one legal tests of trademark infringement is customer confusion, you be the judge: Are the marks confusing enough that customers might think products bearing them are from the same source?

For the London Free Press – March 1, 2010

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Companies have been sent a clear message — deal with complaints because dispute resolution is too impractical to pursue.

A recent Ontario Court of Appeal ruling confirms an evolving trend to protecting consumers from enforcement of mandatory arbitration clauses in consumer agreements.

The plaintiff in Griffin v. Dell Canada alleged Dell had sold computers with latent defects that made them prone to overheating, power failure, inability to “boot up” and unexpected shutdowns.

Griffin sought certification of the case as a class action. In reply, Dell moved to stay the proceeding in favour of private individual arbitration under the mandatory arbitration clause in each consumer contract. The arbitration clause directed that complaints must be taken to the (now defunct) National Arbitration Forum in Minnesota.

Dell relied on sec. 7(1) of the Ontario Arbitration Act, which requires the court to stay a proceeding where there is a valid mandatory arbitration clause.

A lower court had dismissed Dell’s motion and conditionally certified the case as a class action. The appeal court dismissed Dell’s appeals and refused to stay the class proceeding.

The appeal court relied on provisions of the Consumer Protection Act that invalidate mandatory arbitration clauses in consumer contracts. These provisions took effect in 2005, after the consumer contracts with Dell were entered into. But the court chose to rely on them because damages did not arise until after the provisions took effect.

Interestingly, the court also ensured the rights of non-consumers within the class were protected. The Consumer Protection Act restricts the definition of a “consumer” to an individual who “acts for personal, family or household purposes and does not include a person who is acting for business purposes”. But the court found it unreasonable to separate the claims of consumers and non-consumers.

In applying the consumer protection law, the appeal court made a point of noting that Dell’s mandatory arbitration clauses were simply unfair to Canadian consumers.

Writing for the court, Justice Robert Sharpe said: “In my view, it is clear beyond any serious doubt on this record that staying any claims advanced in the action will not result in any of the stayed claims being arbitrated. I agree with the motion judge that there is a lack of reality to Dell’s argument that the claim should proceed by way of arbitration. There will be no arbitration. The choice is not between arbitration and class proceeding; the real choice is between clothing Dell with immunity from liability for defective goods sold to non-consumers and giving those purchasers the same day in court afforded to consumers by way of the class proceeding.”

The appeal court has sent a clear message that consumer rights must be taken seriously. Large corporations will now have more difficulty avoiding responsibility for addressing consumer complaints by making dispute resolution too impractical to pursue.

My 2 cents worth on this topic appeared in the London Chamber of Commerce “the View” section in Yesterday’s Free Press.  In the interest of transparency, I should point out that I am on the Chamber board of directors – which explains why I was asked to contribute – but did not influence my answers.

For the London Free Press – February 22, 2010

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Industry Canada recently released four reports which explore the environmental impact of product design and supply chains. They enable businesses to understand current trends and recognize the benefits of adopting new and more environmentally friendly practices.

The reports are relevant to any business that designs or manufactures products, or is involved in shipping them to retailers or consumers. They are available on the Industry Canada website at www.ic.gc.ca

The first report – Design for the Environment: Innovating to Complete – was prepared by Industry Canada in partnership with Design Exchange and Manufacturers and Exporters to review the concept of Design for Environment. According to this report, the analysis “is intended to help Canadian product design makers understand current trends and recognize the advantages of adopting Design for Environment practices to improve business competitiveness”.

A key finding is that “firms are using several Design for Environment strategies including: design for resource and emission efficiency; design for recyclability, disassembly, and environmentally friendly disposal; and design for reduced packaging”. At the same time, however, small and medium scale businesses may lack the knowledge and resources to implement the Design for Environment strategies and are less aware of the business benefits. This report may help those businesses.

The second report — Green Supply Chain Management: Retail Chains & Consumer Product Goods — was prepared by Industry Canada in partnership with Supply Chain and Logistics Association Canada and Retail Council of Canada. It explores the concept of Green Supply Chain Management (GSCM), which “is becoming increasingly important for Canadian retail chains and consumer product goods (CPG) business partners”.

One of the key findings is that “many retail chains and CPG manufacturers are seeing improvements in energy usage, waste reduction, packaging reduction, and greenhouse gas emissions in distribution activities”. This report is beneficial to those in the Canadian retail and consumer products supply chain.

The third report – Green Supply Chain Management: Manufacturing – was prepared by Industry Canada in partnership with Supply Chain and Logistics Association Canada and Canadian Manufacturers and Exporters. It explores the trends and the benefits associated with adopting GSCM practices in distribution activities and is geared towards Canadian manufacturing supply chain executives.

One of the key findings is that “the reduction of energy consumption and lowered greenhouse gas emissions in distribution activities are the two main environmental improvements arising from the adoption of GSCM practices”. It is noted that “since many GSCM practices require limited investment, are low-risk, and offer short-term return-on-investment periods, businesses of all sizes are able to engage in these activities”.

The fourth report – Green Supply Chain Management: Logistics & Transportation Services – was prepared by Industry Canada and Supply Chain & Logistics Association Canada. This report “provides unique insights to help Canadian logistics and transportation services executives understand the current trends and to recognize the benefits of adopting GSCM practices”.

One of the key findings is “most logistics and transportation service providers implementing GSCM practices see improvements in energy reduction, waste reduction, and reduced packaging in distribution activities”.

For the London Free Press – February 8, 2010

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Canadians are invited to submit comments

Canada’s Privacy Commissioner, Jennifer Stoddart, recently announced a new consultation with the Canadian public on privacy issues related to the online tracking, profiling and targeting of consumers by marketers and other businesses.

Canadians are invited to submit comments and participate in panel discussions. Details are on the Privacy Commissioner’s website at http://www.priv.gc.ca/.

The commissioner says this consultation will “provide a forum for the exploration of the privacy implications related to this modern industry practice, and the protections that Canadians expect. Our goal, therefore, is to shine a spotlight on this evolving technological trend.”

Online consumer tracking takes several different forms. The most basic level of tracking places cookies on one’s computer to collect data about browsing habits. Global Positioning Systems (GPS) in mobile devices can supply consumer data. Deep packet inspection of Internet traffic is another way to gather data.

Of course, we advertise a vast amount of personal information about ourselves when we join social networking sites. Facebook, MySpace and LinkedIn are prime examples.

What many may not realize is that personal data available about anyone can be gathered from various sources and pieced together to create comprehensive personal profiles which are available for a price. The buyer may use the information to help them market their products to specific consumer groups. It can be a valuable commodity.

It is unlikely that anyone will put a complete stop to online consumer tracking. Some of it offers real benefits to consumers. The key is to attain a balance where privacy is respected without getting in the way of the advantages the technology provides.

Transparency and choice are important components. We should be made aware of what is being collected and why, and be able to choose whether or not the benefits are worth the disclosure.

This consultation is an opportunity for the public to become engaged in a topic that affects us all. Written submissions are being accepted until March 15.

They are also looking for people to take part in formal discussion panels in Toronto in April, and in Montreal in May.

This consultation aims to give the commissioner’s office a “comprehensive view of the privacy risks associated with the online tracking, profiling and targeting of consumers, and contribute to the development of new public education and outreach materials,” it says.

“It will also help shape the office’s input into the next parliamentary review of the private-sector Personal Information Protection and Electronic Documents Act.”

A second consultation will be held later focused on cloud computing, or using software from a remote location rather than having it on your own computer. It, too, is a technology that has compelling advant-ages, but can carry privacy risks and uncertainties.

For the London Free Press – February 1, 2010

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IBM recently announced that Euro Partners, a New York-based brokerage, downloaded $1.7 US million worth of IBM software between 2003 and 2008 without permission.

Euro Partners, a unit of BGC Partners, was acquired by BGC in 2005 for about $97.3 million. IBM accuses BGC of downloading extra copies of its Informix software without paying licensing fees.

IBM is suing BGC for breach of contract and copyright infringement and is seeking an injunction to impound all improperly downloaded copies of its software.

In 2008, after a customer audit, IBM found BGC was downloading more copies of Informix than its purchase agreement allowed. In September 2008, IBM sent BGC a bill for $1,730,665.24; BGC refused to pay.

In December, IBM offered BGC a new licence covering both previously licensed copies of Informix and the improperly downloaded copies. When BGC said no, IBM terminated BGC’s International Program License Agreement.

As a condition of its IPLA, BGC was required to destroy its copies of Informix. Not only did BGC refuse to destroy existing copies, but it downloaded more after the IPLA ended.

This is not the only example of a software distributor playing hardball and cracking down on users of unlicensed software.

The Business Software Alliance, an industry trade group that polices software licences, announced last fall it settled with 12 Canadian companies for a total of $431,336 in damages for using unlicensed software. Settlements ranged from $11,900 to $128,800.

These are not always instances of intentional “theft” of software. Sometimes the business simply doesn’t keep proper track of its software use compared to what they have actually licensed.

The most common way software vendors become aware of improper use is through tips from current or former employees.

In its 2009 Global Software Piracy Study — available at www.bsa.org — the alliance notes that “in 2008, the worldwide monetary value of unlicensed software — ‘losses’ to software vendors — was $53 billion. This was up $5.1 billion from 2007, or 11%, in non-constant dollars.” In 2008, “for every $100 of legitimate software sold, another $69 was pirated.”

Calling this entire amount “losses” is a stretch, since many of those who copied would simply not use the software if they had to pay for it.

Regardless, it is clear that any business or organization that uses a significant amount of unlicensed software — whether intentionally or through lax management — exposes itself to possible fees and damage claims likely to exceed the actual licence fees. Not to mention the internal time and public embarrassment entailed in such a claim.

For the London Free Press – January 25, 2010

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“Responsible communication” expands media freedom of expression and opens door to more frank discussion of matters of public policy

If you don’t have anything nice to say, be sure to say it in the name of public interest.

The Supreme Court of Canada recently changed defamation law with its ruling in Grant v. Torstar. The case dealt with allegations that a wealthy land developer in Northern Ontario had bypassed regular government approval procedures for building a golf course, courtesy of friends in high places.

The Charter of Rights and Freedoms guarantees freedom of expression. But there’s a limit to what one can express.

Under defamation law, if a statement unjustifiably compromises a person’s reputation, that person can sue for damages.

In recent years, there has been concern that defamation law has resulted in media outlets suffering “libel chill.” The suggestion is the media have toned down or left out what they wished to say, for fear of being sued.

In the Grant v. Torstar decision, the Supreme Court created a new defence to defamation. This “responsible communication” defence effectively expands the freedom of expression afforded to media and opens the door to more frank discussion of matters of public policy.

To succeed, the new defence requires that the publication must be a matter of public interest, and the publisher must have been diligent in trying to verify the allegations. Factors to be considered when measuring diligence are:

• the seriousness of the allegation
• the public importance of the matter
• the urgency of the matter
• the status and reliability of the source
• whether the plaintiff’s version of the story was asked for and accurately reported
• whether including the defamatory statement was justifiable
• whether the statement’s public interest lay in the fact that it was made rather than its truth
• other relevant circumstances.

In other words, it is now possible to inaccurately report something of public interest, but have a viable defence to defamation so long as you take steps to get your facts straight at the outset.

This change is unlikely to result in a media free-for-all. In the decision, Chief Justice Beverley McLachlin cautions “The protection offered by a new defence based on conduct is meaningful for both the publisher and those whose reputations are at stake. The press and others engaged in public communication on matters of public interest, like bloggers, must act carefully, having regard to the injury to reputation that a false statement can cause.”

It is noteworthy that bloggers are explicitly included in this test. Whatever uncertainty existed previously about allegations in cyberspace, the law is now clear: if you make controversial claims, you must do due diligence, however you publish them.

For the  London Free Press – January 18, 2010

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Rival service Plurk alleges Microsoft copied as much as 80% of the code used in running the Juku program without permission

Microsoft recently susp-ended its new microblogging site, Juku, after it became clear the site contained code taken without permission from rival startup Plurk, a free social networking and microblogging service based in Canada.

Plurk recently alleged Microsoft copied as much as 80% of the code used in running the Juku program without permission. After investigating, Microsoft confirmed some Juku code had been used without permission and apologized to Plurk.

Though Microsoft admitted the plagiarism, it claimed a Chinese vendor developing the Juku application for MSN China was responsible for copying the code without permission.

“When we hire an outside company to do development work, our practice is to include strong language in our contract that clearly states the company must provide work that does not infringe the intellectual property rights of others . . . we are obviously very disappointed, but we assume responsibility for the situation. We apologize to Plurk and we will be reaching out to them directly to explain what happened and the steps we have taken to resolve the situation,” Microsoft said in a statement.

In response, Plurk co-founder Alvin Woon said, “we are still thinking of pursuing the full extent of our legal options available due the seriousness of the situation . . . basically, Microsoft accepts responsibility, but they do not offer accountability.”

“This event wasn’t just a simple matter of merely lifting code . . . due to the nature of the uniqueness of our product and user interface, it took a good amount of deliberate studying and digging through our code with the full intention of replicating our product-user experience, functionality, and end results. This product was later launched and heavily promoted by Microsoft with its big marketing budget,” Woon said.

This is not the first time Microsoft has apologized for infringing the intellectual property rights of others.

A month before the Juku allegations, Microsoft apologized for another third-party vendor improperly incorporating open-source codes into a Windows 7 download tool. The tool was developed to allow users to more easily load Windows 7 onto thumb drives. Microsoft subsequently withdrew the tool.

The recent allegations about Microsoft have caught many by surprise given that Microsoft has been a leader in the fight against piracy in China and elsewhere.

The lesson for anyone who hires others to create code or other creative works is the importance of having an agreement in place that requires the code to be original.

In the Juku case, it appears the contractor did not abide by that requirement. But having it in place let Microsoft move swiftly to protect its reputation, and show that, while it may be ultimately responsible, it did not intend or condone the copying. It should also give Microsoft some recourse against the contractor.

For the London Free Press – January 11, 2010

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The velocity of change will continue to increase over the next 10 years, expert predicts

Bill Gates once said we overestimate the change that will occur in two years, and underestimate the change that will occur in the next 10. 

As digital technology continues to evolve and the proportion of digital natives (those who grew up with it) vs. digital immigrants (those who have adapted to digital technology) increases, we will see dramatic changes. 

To start this new decade, I asked futurist Jim Carroll where we might be 10 years from now. 

Since he’s sometimes a bit ahead of his time, Jim referred to an article he wrote a few years ago (www.jimcarroll.com/weblog/archives/000798.html) as a place to start: 

Laptop computers: “What laptop? Your desk will be monitored by a 3-D virtual sensor that traces the action of your fingers. You won’t be typing onto a keyboard anymore, since there isn’t one. Instead, a holographic keyboard will be projected onto your desktop.” 

That’s not as farfetched as it sounds. Within the next year, we will be able to buy Microsoft’s Natal gesture-recognition system for the Xbox. And the sixth-sense wearable computer has been demonstrated that uses no keyboard, and no screen. 

The landline telephone: “It’s likely to be ’so yesterday.’ An office with virtual 3-D long-distance video chat will be normal. The entire industry will have defragmented and disappeared, as technological change drives many of the current business models into absolute obsolescence.” 

The telephone is already becoming a personal device, rather than a household device. Many digital natives don’t even bother with a landline. And the cost for computer-to-computer video phone calls, using tools like Skype, is basically zero. 

Eyedrops: “The trend towards hyperconnectivity will impact medical products in a big way. The packaging in which the eyedrops are purchased will ‘connect’ to the global data grid that surrounds us, automatically pulling up a short interactive video on whatever screen that happens to be handy, with instructions on use and precautions. In effect, the role of product packaging will have been transformed from being that of a ‘container of product’ to an intelligent tool that will help us with use of the product.” 

Hyperconnectivity will change things in ways we can’t now imagine. Advances in sensors and circuitry will make it cheap and easy to connect everything to the Internet. It will only take some creative thinkers to figure out how we can use that for useful, practical purposes. 

Window shades: “Think ’smart-glass.’ Our need for window shades will soon be eclipsed by intelligent glass that will automatically adjust its opacity and transparency for various conditions. Whether it’s bright sunlight, a need to better manage heating and cooling costs, or to provide for greater privacy, it’s likely that we’ll see rapid changes with this basic component of the home and office.” 

All these predictions are realistic given recent and expected advances. The velocity of change will continue to increase. 

One truly safe prediction is that 10 years from now, we will routinely do things that seem like science fiction today, or perhaps that science fiction has not yet imagined.

For the London Free Press – December 21, 2009

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This Christmas, give a gift to the planet and use less paper.

Lawyers may be one of the worst offenders when it comes to printing things instead of reading and saving them electronically.

For the most part, we have the technology — it’s primarily a habit and mindset issue. After all, the electronic documents we create on our computers are actually the originals. Paper versions are really just copies.

Here are a few things we all can do:

- Don’t print anything unless it’s really necessary. I’ll say more on this later.

- Ask those who send us documents to send them electronically.

- Stop using fax machines. Indeed, get rid of your fax phone line, recycle your fax machines, and disable the function on multi-purpose machines. Anything that can be faxed can be e-mailed as an attachment. If you absolutely must receive faxes, set up a computer to receive them, so they don’t have to be printed.

- Stop doing paper reports. Lawyers, for example, often send clients binders full of documents after closing a deal. It’s important for clients to have those, but except for signed original documents, there is no reason why most of that can’t be done electronically.

Printing hard copies can be expensive, time-consuming and wasteful. So before you hit print, ask yourself why you’re printing:

- If it is to read the document, read it on the screen.

- If it is to save it, save it electronically. Think of hard drives as a virtual filing cabinet. Electronic storage space, storage and search utilities, and backup solutions are all inexpensive. It takes far less space than paper, and has the added advantage of making it easier to find things later.

- If it is to share it with someone else, e-mail them the document or a link to it.

- If it is a letter to mail, print it as a pdf and e-mail it instead. That preserves the look and formality of a letter for things you don’t want to just send as an e-mail.

- If it is necessary to print something for someone else to have, think about how you can summarize the important parts quickly, and provide web addresses for parts that are common or for background material.

All these things can be done without investing in new technology. Sometimes, such as when reviewing or commenting on a document, writing on it in pen is quicker and more efficient than using electronic comment tools. But even that can be reduced. Tools are available that let you write on an electronic document just as you would on a paper version.

If you use a laptop, consider a tablet version. Tablets have been around for years, but have not sold well, in part due to the premium price. Windows 7 includes good touch-screen and tablet features. And some predict that 2010 will be the year of the tablet computer.

If you use a desktop, USB-connected tablets to write on have become affordable.