Toronto Computer Lawyers Group

The Year in Review: Developments in

Computer, Internet and
E-Commerce Law (2009-2010)

May 26, 2010

Barry B. Sookman
bsookman@mccarthy.ca
416-601-7949

1270489
 2

CONTRACTS/IT Contracts
Tercon Contractors Ltd. v. British Columbia, 3

2010 SCC 4
• Does fundamental breach vitiate a limitation of liability clause?
• “It is apparent from the decision that henceforth, parties seeking to avoid
contractual limitations of liability will have to find the clause inapplicable based
on its limited intended scope, or by pointing to some paramount consideration
of public policy sufficient to override the public interest in freedom of contact
that would defeat what would otherwise be the contractual rights of the
parties.” 
• “As Duff C.J. recognized, freedom of contract will often, but not always, trump
other societal values. The residual power of a court to decline enforcement
exists but, in the interest of certainty and stability of contractual relations, it
will rarely be exercised. Duff C.J. adopted the view that public policy “should
be invoked only in clear cases in which the harm to the public is substantially
incontestable, and does not depend upon the idiosyncratic inferences of a few
judicial minds” While he was referring to public policy considerations pertaining
to the nature of the entire contract, I accept that there may be well-accepted
public policy considerations that relate directly to the nature of the breach, and
thus trigger the court’s narrow jurisdiction to give relief against an exclusion
clause.”
Internet Broadcasting Corporation Ltd. v Mar LLC 4
[2009] EWHC 844 (Ch)
• Do limitations of liability and disclaimers survive a deliberate wrongful termination of a contract?
• (1) There is no rule of law applicable and the question is one of construction.
• (2) There is a presumption, which appears to be a strong presumption, against the exemption clause
being construed so as to cover deliberate, repudiatory breach.
• (3) The words needed to cover a deliberate, repudiatory breach need to be very "clear" in the sense
of using "strong" language such as "under no circumstances...".
• (4) There is a particular need to use "clear", in the sense of "strong", language where the exemption
clause is intended to cover deliberate wrongdoing by a party in respect of a breach which cannot,
or is unlikely to be, covered by insurance. Language such as "including deliberate repudiatory acts
by [the parties to the contract] themselves..." would need to be used in such a case.
• (5) Words which, in a literal sense, cover a deliberate repudiatory breach will not be construed so
as to do so if that would defeat the "main object" of the contract.
• (6) The proper function between commercial parties at arm's length and with equal bargaining
power of an exemption clause is to allocate insurable risk, so that an exemption clause should not
normally be construed in such cases so as to cover an uninsurable risk or one very unlikely to be
capable of being insured, in particular deliberate wrongdoing by a party to the contract itself (as
opposed to vicarious liability for others).
• (7) Words which in a literal sense cover a deliberate repudiatory breach cannot be relied upon if
they are "repugnant”.
Gammasonics  Institute for Medical Research Pty Ltd v 5
Comrad Medical Systems Pty Ltd [2010] NSWSC 267
(9 April 2010)
• Is a software download a good?
• “In this case, the plaintiff submitted that it is productive of injustice if
consumers purchasing software in the form of CDs or DVDs, either sold in
retail shops or via the internet, are protected by the statutory warranties
in the Sale of Goods Act, whereas consumers who download the same
software directly from the internet or from a supplier, (as was the case
here), would not. Accepting that to be the case, rectifying that injustice
or perceived injustice in this case, is a matter deserving of a legislative
review of the operation of the Sale of Goods Act rather than judicial
intervention.”
• “Although her Honour found that the Sale of Goods Act did not apply, she
was nonetheless satisfied that the common law terms as to fitness for
purpose and merchantable quality should be implied in accordance with
the well settled test for implication”.
Kingsway Hall Hotel Ltd. v Red Sky IT (Hounslow) Ltd. 6
[2010] EWHC 965
• “Pursuant to S14 of the Sale of Goods Act 1979, a term is to be implied into
the contract that Entirety would be fit for the purpose for which it was
bought, namely that the system would increase revenue and occupancy levels
and would allow quicker check-in and check-out, including accurately
processing groups and making changes to group reservations while preserving
the accuracy of the system. I am satisfied that Entirety was not fit for the
purpose for which it was sold.
• Pursuant to Section 4 of the Supply of Goods and Services Act 1982 a term is
to be implied into the contract that the goods were of satisfactory quality.
Entirety did not meet the standard that a reasonable person would regard as
satisfactory, taking into account any description of the goods, the price and
all other circumstance so as to satisfy S4(2A) of the 1982 Act.
• Kingsway  was entitled, as they did, to reject Entirety which, as delivered,
was not of satisfactory quality or fit for its purpose. They were entitled to do
so after giving  Red Sky every opportunity to improve Entirety, so that it
would become of satisfactory quality and fit for its purpose.”
 7
BSkyb Ltd v HP Enterprise Services UK Ltd [2010]
EWHC 86 (TCC) (26 January 2010)
• “BSkyB has won at least a substantial part of its £709 million (US$1.15 billion) lawsuit against EDS, over a failed
£48 million customer system implementation...
• The lawsuit alleged that EDS, now owned by HP, had fraudulently misrepresented itself in a sales pitch in 2000
for the system, leaving Sky to pick up the pieces and take on heavy costs as it implemented the system itself.
EDS, on the other hand, said Sky did not know what it wanted, and kept introducing new requirements, making
it difficult to deliver...
• The judgement is expected to change the legal basis for sales pitches and contracts. It is likely to mean that IT
services companies will have to be very careful about what they suggest they are able to do during sales
meetings, as they may be held accountable even if discussions are informal.
• The judgement took 17 months to reach from the end of the trial in July 2008, partly because it is seen as
setting a precedent, and also because hundreds of paper files and thousands of emailed documents were
dragged up to substantiate and counter the claims.
• Nigel Roxburgh, former research director at the National Outsourcing Association, previously told
Computerworld UK that if the case is upheld in favour of BSkyB, "it could lead to a real scratching of heads,
particularly among lawyers".
• "If other representations become more important than contracts themselves, it could indicate that contracts
effectively have no value," he said. It also potentially risks Entire Agreement Clauses, which exist in most
supplier contracts and insist that only terms in the contract are legally binding, rather than any other
representations.” IT World Jan 27, 2010
Griffin v. Dell Canada Inc., 2010 ONCA 29 8

• Are arbitration clauses enforceable in consumer contracts?

• The appeals involve a proposed class action arising from the sale of allegedly defective Dell notebook
computers. Dell’s standard-form sales agreement contains a clause requiring that all disputes be submitted
to arbitration.  
• S7 CPA, which applies “despite any agreement or waiver to the contrary” states “any term or
acknowledgment in a consumer agreement or a related agreement that requires or has the effect of
requiring that disputes arising out of the consumer agreement be submitted to arbitration is invalid insofar
as it prevents a consumer from exercising a right to commence an action in the Superior Court of Justice
given under this Act.”
“Consumer contracts tend to be contracts of adhesion where the suppliers of services and sellers of goods
are in a position to impose their own terms unilaterally. Both academic research and the common sense
reflected by the findings of the motion judge in this case indicate that suppliers and sellers regularly insert
arbitration clauses in order to defeat claims rather than out of a genuine desire to arbitrate disputes with
consumers. Such disputes often involve small claims that are not individually viable. Such claims only
become viable if they can be aggregated by way of a class proceeding.”
“In my view, it would not be reasonable to separate the consumer from the non-consumer claims.  We
should, therefore, refuse a partial stay and allow all the claims to proceed under the umbrella of the class
proceeding.
Granting a stay of the non-consumer claims would lead to inefficiency, a potential multiplicity of
proceedings, and added cost and delay. This would be contrary to the Courts of Justice Act, s. 138, which
provides that “[a]s far as possible, a multiplicity of legal proceedings should be avoided”, and contrary to
the jurisprudence on the reasonableness of partial stays under s. 7(5) of the Arbitration Act.”
 9
Amendments to BIA and CCAA (in force as of Sept. 18, 2009)
• S65.11(7) BIA “If the debtor has granted a right to use intellectual property
to a party to an agreement, the disclaimer or resiliation does not affect
the party’s right to use the intellectual property — including the party’s
right to enforce an exclusive use — during the term of the agreement,
including any period for which the party extends the agreement as of right,
as long as the party continues to perform its obligations under the
agreement in relation to the use of the intellectual property.
• S32(b) CCAA “If the company has granted a right to use intellectual
property to a party to an agreement, the disclaimer or resiliation does not
affect the party’s right to use the intellectual property — including the
party’s right to enforce an exclusive use — during the term of the
agreement, including any period for which the party extends the
agreement as of right, as long as the party continues to perform its
obligations under the agreement in relation to the use of the intellectual
Property.”
• Does IP include all common law and statutory rights; databases, publicity
rights; what does “use” mean; rights to distribute or commercialize; does
it apply to affiliates; does it apply outside of Canada?
 10

Electronic Agreements
TracFone Wireless, Inc. v Anadisk LLC 2010 WL
565392 (S.D.Fla. Feb 18, 2010)
• Are shrink-wrap agreements enforceable?
• “In Florida and the federal circuits, shrinkwrap agreements are valid and
enforceable contracts...”
• “The outside retail packaging of TracFone's Phones contain conspicuous
language restricting the use of the Phones for TracFone Prepaid Wireless
service and prohibits the consumer from tampering or altering the software
or hardware in the phone. The language provides in part “[b]y purchasing
or opening this package, you are agreeing to these terms and the terms and
conditions of service in the enclosed user guide.” Accordingly, an
enforceable contract exists between the parties as to Defendants' use of
the Phones and Defendants have breached the parties' contract by, inter
alia, purchasing TracFone Prepaid Phones with the specific intent to reflash
or unlock the phones and ship the phones outside of the United States.”
Defrontes v Dell Inc. 984 A.2d 1061
(Sup.Ct.RH.Isld.2009)
• “After reviewing the case law pertaining to so-called “shrinkwrap”
agreements, we are satisfied that the Pro-CD line of cases is better reasoned
and more consistent with contemporary consumer transactions...
• We therefore decline to adopt the minority view, as urged by plaintiffs, that
a contract is fully formed when a buyer orders a product and the seller
accepts payment and either ships or promises to ship. Instead, formation
occurs when the consumer accepts the full terms after receiving a reasonable
opportunity to refuse them. Yet in adopting the so-called “layered
contracting” theory of formation, we reiterate that the burden falls squarely
on the seller to show that the buyer has accepted the seller's terms after
delivery. Thus, the crucial question in this case is whether defendants
reasonably invited acceptance by making clear in the terms and conditions
agreement that (1) by accepting defendants' product the consumer was
accepting the terms and conditions contained within and (2) the consumer
could reject the terms and conditions by returning the product.”
Defrontes v Dell Inc. 984 A.2d 1061
(Sup.Ct.RH.Isld.2009)
• “In reviewing the language of the terms and conditions
agreement it cannot be said that it was reasonably
apparent to the plaintiffs that they could reject the
terms simply by returning the goods. We believe that
too many inferential steps were required of the
plaintiffs and too many of the relevant provisions were
left ambiguous. We are not persuaded that a
reasonably prudent offeree would understand that by
keeping the Dell computer he or she was agreeing to
be bound by the terms and conditions agreement and
retained, for a specified time, the power to reject the
terms by returning the product.”
 14
Major v McCallister (Miss.CT.App. Dec 23, 2009)
• Are browse-wrap agreements enforceable?
• “The legal effect of online agreements may be ‘an emerging area of the law,’
but courts still ‘apply traditional principles of contract law and focus on
whether the plaintiff had reasonable notice of and manifested assent to the
online agreement.’”
• “ServiceMagic’s site was a browsewrap -- i.e., one where users need not
‘click’ to accept the website terms. Instead, browsewraps indicate in some
fashion that use of the site constitutes acceptance of its terms of service...
uphold browsewraps if the user “has actual or constructive knowledge of a
site's terms and conditions prior to using the site.”
• ServiceMagic did put ‘immediately visible notice of the existence of license
terms’ -- i.e., ‘By submitting you agree to the Terms of Use’ and a blue
hyperlink -- right next to the button that Appellant pushed. A second link to
those terms was visible on the same page without scrolling, and similar links
were on every other website page....
• For these reasons, Appellant’s contention that the website terms were so
inconspicuous that a reasonably prudent internet user could not know or learn
of their existence, or assent to them without a ‘click,’ is unconvincing.”
DC Laboratories, Inc. v. Hach Co., 2009 WL 15

2605270 (C.D.Ill.,Aug 25, 2009)

• “the Court finds that the Terms were conspicuous enough... It is
undisputed that the Terms were hyperlinked on three separate
pages of the online Plate order process in underlined, blue,
contrasting text... Further evidence of the Terms'
conspicuousness is the fact that they were brought to attention
by being specifically referenced in the final order step which
read: “STEP 4 of 4: Review terms, add any comments, and
submit order,” and was followed by a hyperlink to the Terms...
Though PDC does not state whether or not they read the Terms,
it is inconsequential to the Terms' conspicuousness
or PDC's accent thereto. See Druvan v. Jagger, 508 F.Supp.2d
228, 237 (S.D.N.Y. 2007) (where the court found that the
plaintiff was bound to online terms regardless of whether she
actually read them).”
Hines v. Overstock.com, Inc. 668 F.Supp.2d 362 16
(E.D.N.Y. 2009)
• “In ruling upon the validity of a browsewrap agreement, courts consider
primarily ‘whether a website user has actual or constructive knowledge of a
site's terms and conditions prior to using the site.’”
• “In the instant case, it is clear that Plaintiff had no actual notice of the
Terms and Conditions of Use. Defendant has also failed to show that
Plaintiff had constructive notice. The Hawkins Affidavit...[or] refute
Plaintiff's sworn statement that she was never advised of the Terms and
Conditions and could not even see the link to them without scrolling down
to the bottom of the screen-an action that was not required to effectuate
her purchase. Notably, unlike in other cases where courts have upheld
browsewrap agreements, the notice that “Entering this Site will constitute
your acceptance of these Terms and Conditions,” was only available within
the Terms and Conditions... Hines therefore lacked notice of the Terms and
Conditions because the website did not prompt her to review the Terms
and Conditions and because the link to the Terms and Conditions was not
prominently displayed so as to provide reasonable notice of the Terms and
Conditions.”
Tradecomet.com LLC v Google, Inc. 2010 WL
779325 (S.D.N.Y. Mar. 5, 2010)
• Are click-wrap agreements enforceable?
• “The agreements at issue here are “clickwrap arrangements” in which users of
Google's AdWords program are required to agree to the proffered terms in order to
use the program.”
• “The Second Circuit “regularly enforce[s]” forum selection clauses as long as ‘the
existence of the clause was reasonably communicated to the parties.’”
• “District courts in this Circuit have found that clickwrap agreements that require a
user to accept the agreement before proceeding are “reasonably communicated” to
the user for purposes of this analysis.”
• “Google bears the burden of demonstrating that it reasonably communicated the
forum selection provision to TradeComet...Google offers testimony and screenshots
showing the status of TradeComet's AdWords accounts to support its contention that
TradeComet accepted the August 2006 Agreement and that it had to click through
the text of that agreement to do so...” (emphasis added)
• See also, Universal grading Services v eBay, Inc. 2009 WL 2029796 (E.D.N.Y. June 10,
2009)
Scherillo v. Dun & Bradstreet, Inc. 684
F.Supp.2d 313 (E.D.N.Y.2010.)
• “Directly below this text box there is more text that reads: “I have
read and AGREE to the terms and conditions shown above.”
Immediately adjacent to this text is a much smaller, empty box
(“the terms and conditions check box”). Also at the bottom of the
page is another box containing the phrase “Complete Registration”
(“the Complete Registration box”). Clicking on this box completes
the user's registration. McDonald testified that if a user clicks on
the Complete Registration box without checking the terms and
conditions check box, the user is unable to complete registration
and is returned to the registration page. 
• “plaintiff's primary contention is that he did not actually consent to
the clause, and he sought to show that it was possible for him to
unknowingly and involuntarily “check” the terms and conditions
check box.”
Scherillo v. Dun & Bradstreet, Inc. 684
F.Supp.2d 313 (E.D.N.Y.2010.)
• “the Court finds plaintiff's testimony that he did not realize he
had checked the box accepting the terms and conditions not to
be credible... to accept plaintiff's theory, the Court would have
to find that plaintiff hit two keys accidentally-the space bar and
the return key-and that he was then involuntarily and
unexpectedly sent to the next screen where he nonetheless
proceeded to enter his credit card information and complete
the purchase of the report. This alleged chain of events is
simply not credible. The Court finds that plaintiff knowingly and
voluntarily “checked” the terms and conditions box and
assented to the clause.”
• See also, Appliance Zone, LLC v Nextag, Inc. 2009 WL 5200572
(S.D. Inc. 2009)
Scherillo v. Dun & Bradstreet, Inc. 684
F.Supp.2d 313 (E.D.N.Y.2010.)
• “The fact that plaintiff had to “scroll” through a text box to get
to the provision containing the forum selection clause does not
affect the Court's analysis. Instead, this Court concludes that
forum selection clauses are “reasonably communicated” to a
webpage user even where a user simply has to scroll down a
page to read the clause...
• A person who checks the box agreeing to the terms and
conditions of a purchase on an internet site without scrolling
down to read all of the terms and conditions is in the same
position as a person who turns to the last page of a paper
contract and signs it without reading the terms-namely, the
clause is still valid. In sum, the Court concludes that the forum
selection clause was reasonably communicated to the plaintiff.”
LTVN Holdings LLC v. Odeh 2009 WL
3736526 (D.Md.2009)
• “Mr. Odeh asserts that because he clicked “register” only
once, the forum selection clause does not bind him. He
argues that, by contrast, the defendants in Field agreed
to the forum selection clause every time they accessed
the plaintiff's online database over the course of four
years. But a party need not assent to an agreement
multiple times in order for a contract to be
enforceable... In Field, the fact that the defendants
agreed to the website's terms of use each time they
accessed the plaintiff's online database reinforced the
court's conclusion that the defendants had consented to
personal jurisdiction, but it was not dispositive.”
Brodsky v. Match.com LLC  2009 WL
3490277 (S.D.N.Y. Oct. 28, 2009)
• “Prior to continuing and completing Match's subscription and
payment process, each subscriber to Match.com, including
Brodsky and other putative class plaintiffs, must check a box
on the website affirming “I agree to the Match.com terms of
use,” which statement is hyperlinked to a complete copy of
the 11-page User Agreement. The first paragraph of the User
Agreement states: “If you object to anything in this Agreement
or the Match.com Privacy Policy, do not use the Website or the
Service.”
• “it is clear that the forum selection clause in Match's User
Agreement is reasonably communicated and mandatory, and
that it covers the claims involved here-i.e., it is presumptively
enforceable.”
Brodsky v. Match.com LLC  2009 WL
3490277 (S.D.N.Y. Oct. 28, 2009)
• “It is perfectly reasonable and legitimate for Match-in operating a
website and service accessible to users anywhere in the country-to
have decided that any disputes about its website and services
should be litigated in Texas, the State in which it is headquartered
and where all of its employees reside. Indeed, as a website and
service provider, Match would appear to have no practical
alternative than to include a forum selection and choice of law
clause in its User Agreement, since otherwise Match could
potentially be subject to suit in any of the fifty states arising from
its website or service. Accordingly, because Match's forum
selection clause meets the standard for presumptive enforceability
under well-settled law and plaintiffs have failed to make the
strong showing required to overcome that presumption, we shall
give effect to the forum selection clause.”
Miller v. Facebook, Inc., No. 09-02810 24

(N.D. Ga. Jan. 15, 2010) 

• “Even if the court were to assume without deciding

that the TOU was a contract of adhesion, striking the
forum selection clause could wreak havoc on the
entire social-networking internet industry. If this
court were to determine that the forum selection
clause contained in Facebook's TOU was
unenforceable, the company could face litigation in
every state in this country and in nations around the
globe which would have potential adverse
consequences for the users of Facebook's social-
networking site and for other internet companies.”
National Auto Lenders, Inc. v. SysLOCATE, Inc.
2010 WL 527866 (S.D.Fla.Feb. 10, 2010)
• “Defendants argue that Plaintiff is contractually bound by the
venue and mediation/arbitration clauses in the May Agreements. I
disagree. The individuals that accepted the May Agreements did
not have legal authority to bind Plaintiff.”
• “I find that the elements needed to establish an apparent agency
relationship were not established in this case. Plaintiff's actions did
not create the appearance that two non-executives at NAL were
authorized to contractually bind Plaintiff to the May Agreements.
Plaintiff's executives... specifically told Defendants that they were
NAL's decision makers and solely authorized to enter into
agreements on NAL's behalf... it was unreasonable for Defendants
to believe that the individuals who accepted the May Agreements
were authorized to do so.”
Carimate v. Ginsglobal Index Funds 2009 WL
3233538 (C.D.Cal.Sept.30, 2009)
• Do e-mail exchanges satisfy statutes of frauds?
• Defendants contend that the emails fail to satisfy Delaware's Statute of Frauds
which requires that agreements “not to be performed within the space of one
year ... be reduced to writing, or some memorandum, or notes thereof, are
signed by the party to be charged therewith, or some other person thereunto by
the party lawfully authorized in writing.”
• “Here, in response to Plaintiff's February 18, 2008 email confirming Plaintiff's
understanding on passing worldwide sales through HIG, Defendant Ginsberg
responded, “Yes I agree with your comments re splitting all future initiatives
using Hindsight Investment entity-no problem.” The email signatures clearly
identify the parties.FN6 ”
• “FN6. Delaware statutes make clear that an email with the sender's name
satisfies the signature requirement of the statute of frauds. See 6 Del. C. § 12A-
107(a) (“A record or signature may not be denied legal effect or enforceability
solely because it is in electronic form.”)”
Thomas & Anor v BPE Solicitors (A Firm) [2010]
EWHC 306 (Ch) (19 February 2010) 
• When is an e-mail received?
• “The general rule is that the acceptance of an offer is not effective
until communicated to the offeror. The "postal rule" is an anomalous
exception to the general rule, which is limited to its particular
circumstances. It does not apply to acceptances made by some
"instantaneous" mode of communication (Chitty on Contracts,
30th edn, paragraph 2-050). This was decided in Entores Ltd v Miles
Far East Corporation [1955] 2 QB 327 as regards communications by
telex. At page 334, Denning LJ said that in such a case, "The contract
is only complete when the acceptance is received by the offeror".
Contrary to the claimants' submissions, in my view the same principle
applies to communication by email, at least where the parties are
conducting the matter by email, as the solicitors were in this case.
However, that does not conclude the question, because issues may
remain as to when the email in question was received (and also
whether it was received)”.
Thomas & Anor v BPE Solicitors (A Firm) [2010]
EWHC 306 (Ch) (19 February 2010)
• “Once one sets aside the "postal rule" as inapplicable to email
communications, the question whether an email acceptance is effective when
it arrives, or at the time when the offeror could reasonably be expected to
have read it, is not a straightforward one, and does not appear to be settled
by authority. On the basis that it must be resolved by reference to the
intentions of the parties, by sound business practice and in some cases by
a judgment where the risks should lie (Brinkibon at page 42), the answer
does however appear to me to be clear in the present case. In the context in
which the 18:00 email was sent—that is a transaction which (as the earlier
emails show) could have been completed that evening—I do not consider that
18:00 was outside working hours. The email was available to be read within
working hours, despite the fact that Mr Cusack had in fact gone home. For
that reason, I would have held that were the defendants to have accepted
the Rickerbys undertaking by Mr Dew's email, then as a matter of law such
acceptance would have been effective upon the receipt of the email at or
about 18:00. However, as I have held, they did not do so, nor were they
negligent in that regard.” (emphasis added)
• See, John Gregory “When Is Email Received?” bit.ly/bR7xF6
 29

INTERNET LAW
Grant v. Torstar Corp., 2009 SCC 61
• Do journalists, bloggers and other publishers have a public
interest responsible communication defense to defamation
claims?
• “The defence of public interest responsible communication is
assessed with reference to the broad thrust of the publication in
question. It will apply where: A. The publication is on a matter of
public interest and: B. The publisher was diligent in trying to
verify the allegation, having regard to: (a) the seriousness of the
allegation; (b) the public importance of the matter; (c) the
urgency of the matter; (d) the status and reliability of the source;
(e) whether the plaintiff's side of the story was sought and
accurately reported; (f) whether the inclusion of the defamatory
statement was justifiable; (g) whether the defamatory
statement’s public interest lay in the fact that it was made rather
than its truth (“reportage”); and (h) any other relevant
circumstances.”
Grant v. Torstar Corp., 2009 SCC 61
• “A second preliminary question is what the new defence should be called.  In
arguments before us, the defence was referred to as the responsible
journalism test. This has the value of capturing the essence of the defence in
succinct style. However, the traditional media are rapidly being
complemented by new ways of communicating on matters of public interest,
many of them online, which do not involve journalists. These new
disseminators of news and information should, absent good reasons for
exclusion, be subject to the same laws as established media outlets. I agree
with Lord Hoffmann that the new defence is “available to anyone who
publishes material of public interest in any medium”: Jameel, at para. 54.
•  A review of recent defamation case law suggests that many actions now
concern blog postings and other online media which are potentially both
more ephemeral and more ubiquitous than traditional print media. While
established journalistic standards provide a useful guide by which to evaluate
the conduct of journalists and non-journalists alike, the applicable standards
will necessarily evolve to keep pace with the norms of new communications
media. For this reason, it is more accurate to refer to the new defence as
responsible communication on matters of public interest.”
Crookes v. Newton, 2009 BCCA 392, (leave to SCC
granted)
• Is a hyperlink a publication for defamation purposes?
• “the mere fact that he hyperlinked the impugned sites does not make him a
publisher of the material found at the hyperlinked sites...  
• hyperlinking may, in some cases amount to publication by the person creating the
link. If it is apparent from the context in which the hyperlink is used that it is
being used merely as a bibliographical or similarly limited reference to an original
source, without in any way actively encouraging or recommending to the readers
that they access that source, then, I accept that this would not amount to
publication. 
• It is not sufficient, however, for the creator of a hyperlink to simply depose that
he intended the link to be in the nature of a “footnote” in order to avoid liability
for publication... More significant factors would include the prominence of the
hyperlink, any words of invitation or recommendation to the reader associated
with the hyperlink, the nature of the materials which it is suggested may be found
at the hyperlink (for example, if the hyperlink obviously refers to a scandalous, or
obscene publication), the apparent significance of the hyperlink in relation to the
article as a whole ”and a host of other factors dependant on the facts of a
particular case.”
Metropolitan International Schools Ltd. v Designtechnica
Corp [2009] EWHC 1765 (QB) (16 July 2009) 
• Is a search engine liable for publishing defamatory statements?
• “It is fundamentally important to have in mind that the Third Defendant has
no role to play in formulating the search terms...There being no input from
the Third Defendant, therefore, on the scenario I have so far posited, it
cannot be characterised as a publisher at common law. It has not authorised
or caused the snippet to appear on the user's screen in any meaningful sense.
It has merely, by the provision of its search service, played the role of a
facilitator.”
• “Analogies are not always helpful, but there will often be resort to analogy
when the common law has to be applied to new and unfamiliar concepts.
Here, an analogy may be drawn perhaps with a search carried out in a large
conventional library. If a scholar wishes to check for references to his
research topic, he may well consult the library catalogue. On doing so, he
may find that there are some potentially relevant books in one of the bays
and make his way there to see whether he can make use of the content. It is
hardly realistic to attribute responsibility for the content of those books to
the compiler(s) of the catalogue. On the other hand, if the compilers have
made an effort to be more informative, by quoting brief snippets from the
book, the position may be different.”
Metropolitan International Schools Ltd. v Designtechnica
Corp [2009] EWHC 1765 (QB) (16 July 2009) 
• “The next question is whether the legal position is, or should be, any different once the Third
Defendant has been informed of the defamatory content of a "snippet" thrown up by the
search engine. In the circumstances before Morland J, in Godfrey v Demon Internet, the
acquisition of knowledge was clearly regarded as critical. That is largely because the law
recognises that a person can become liable for the publication of a libel by acquiescence; that
is to say, by permitting publication to continue when he or she has the power to prevent it. As
I have said, someone hosting a website will generally be able to remove material that is
legally objectionable. If this is not done, then there may be liability on the basis of
authorisation or acquiescence.”
• “There is a degree of international recognition that the operators of search engines should put
in place such a system (which could obviously either be on a voluntary basis or put upon a
statutory footing) to take account of legitimate complaints about legally objectionable
material. It is by no means easy to arrive at an overall conclusion that is satisfactory from all
points of view. In particular, the material may be objectionable under the domestic law of
one jurisdiction while being regarded as legitimate in others.”
• “It may well be that the Third Defendant's "notice and take down" procedure has not operated
as rapidly as Mr Browne and his client would wish, but it does not follow as a matter of law
that between notification and "take down" the Third Defendant becomes or remains liable as a
publisher of the offending material. While efforts are being made to achieve a "take down" in
relation a particular URL, it is hardly possible to fix the Third Defendant with liability on the
basis of authorisation, approval or acquiescence.”
R. v. Morelli, 2010 SCC 8
• Does a person possess pornography contrary to the Criminal Code when
browsing on the Internet?
• “merely browsing a website or viewing images onscreen does not
constitute  possession. Neither does creating a bookmark on one’s
computer establish possession over the content of the Website:
bookmarks merely provide quick and easy access to  the indicated
Websites. Indeed, clicking on a bookmark may simply disclose that
material previously on the Website has been removed; that material
previously absent has been added; that the Website address is no longer
valid — or that the Website no longer exists at all.  
• Accordingly, in order to commit the offence of possession (as opposed to
the offence of accessing), one must knowingly acquire the underlying
data files and store them in a place under one’s control. The presence of
the icons might arouse suspicions regarding possession, but it does not
alone support a reasonable inference that the appellant not only
accessed the website and knowingly viewed illegal images located there,
but also took the underlying data file into his control by saving it to the
hard drive, or otherwise.”
R. v. Morelli, 2010 SCC 8
• “It is difficult to imagine a more intrusive invasion of
privacy than the search of one’s home and personal
computer. Computers often contain our most intimate
correspondence.  They contain the details of our
financial, medical, and personal situations. They even
reveal our specific interests, likes, and propensities,
recording in the browsing history and cache files the
information we seek out and read, watch, or listen to on
the Internet.
•  It is therefore difficult to conceive a s. 8 breach with a
greater impact on the Charter-protected privacy
interests of the accused than occurred in this case.”
Review of the Internet traffic management practices of Internet
service providers, Telecom Regulatory Policy CRTC 2009-657, Oct.
21, 2009)
• “With respect to ISPs’ disclosure of technical ITMPs to their retail customers, the
Commission considers that such disclosure should adequately inform consumers
about ITMPs and the impact such practices have on retail Internet services.
• In light of the above, the Commission directs all primary ISPs, as a condition of
providing retail Internet services, to disclose to their retail customers, clearly and
prominently on their websites, information related to their technical ITMPs. The
ISP must also reference its online disclosures in relevant marketing materials,
customer contracts, and terms of service. Online disclosure should include the
following information: why ITMPs are being introduced;
•  who is affected by the ITMP;
•  when the Internet traffic management will occur;
•  what type of Internet traffic (e.g. application, class of application, protocol) is
subject to management; and
•  how the ITMP will affect a user’s Internet experience, including the specific
impact on speeds.”
Bill C-22 An Act respecting the mandatory reporting of Internet child
38
pornography by persons who provide an Internet service

• The proposed legislation would apply to suppliers of Internet

services to the public, including those who provide electronic
mail services, internet content hosting services, and social
networking sites. It would require them to:
• Report, to a designated agency, tips they receive regarding Web
sites where child pornography may be available to the public;
and,
• Notify police and safeguard evidence if they believe that a child
pornography offence has been committed using an Internet
service that they provide.
• Failure to comply with the duties under the legislation would
constitute an offence punishable by graduated fines.
• Bill at http://ow.ly/1OMDx; Backgrounder: Protecting children
from online sexual exploitation at http://ow.ly/1IRTX
 39

Internet Jurisdiction
Lucasfilm Ltd & Ors v Ainsworth & Anor [2009] EWCA Civ 40

1328 (16 December 2009)

• Can a foreign claim for copyright infringement be adjudicated in a domestic forum?
• “Firstly we think that the two-fold rule in Moçambique applies to such
claims... Infringement of an IP right...is essentially a local matter involving local policies
and local public interest. It is a matter for local judges.
• Secondly enforcement may involve a clash of the IP policies of different countries...
• Thirdly... Extra-territorial jurisdiction will involve (and does here) a restraint on actions
in another country – an interference which prima facie a foreign judge should avoid...
• Fourthly if national courts of different countries all assume jurisdiction there is far too
much room for forum-shopping, applications for stays on forum non conveniens grounds,
applications for anti-suit injunctions and applications for declarations of non-
infringement.
• Fifthly it is quite clear that those concerned with international agreements about
copyright have refrained from putting in place a regime for the international litigation of
copyrights by the courts of a single state...
• Sixthly all of the other considerations which we have mentioned and which led the Court
of Appeals in Voda to decline jurisdiction over foreign patent claims apply equally to
enforcement of a foreign copyright here.”
Lucasfilm Ltd & Ors v Ainsworth & Anor [2009] EWCA Civ 41
1328 (16 December 2009)
• To enforce a foreign judgement, UK law requires that the judgment debtor be
present in the foreign country at the time proceedings are commenced.
• “Therefore, does the use by Mr Ainsworth or his company of the
website...amount to such presence?
• …The question... is whether for current purposes the internet or a website are
fundamentally different from other matters which have enabled business
persons to present themselves and their products where they are not themselves
present: such as advertisements, salesmen, the post, telephone, telex and the
like. We do not believe so...
• On the contrary, it might be said that the sheer omnipresence of the internet
would suggest that it does not easily create, outside the jurisdiction or
jurisdictions in which its website owners are on established principle already to
be found, that presence, partaking in some sense of allegiance, which has been
recognised by our jurisprudence and rules of private international law as a
necessary ingredient in the enforceability of foreign judgments.”
• *Note under Pro Swing Inc. v. Elta Golf Inc., 2006 SCC 52 the result would be
different in Canada.
Editions du Seuil v Google Inc, Tribunal de Grande 42
Instance de Paris 3ème chambre, 2ème section Ruling of
December 18, 2009
• Does French law apply to acts of scanning books in the US and by transmitting
snippets to France?
• French law applies to the acts of digitization and publication of extracts.
• “But seeing that the law applicable to non-contractual liability in tort complex is
the state where the harmful event occurred; this place means that both the fact
that the damage that that place of realization of the latter;
• in this case, it is undisputed that the disputed works of French authors to be
scanned with excerpts available to users on French national territory, that also
should be noted that besides the fact that the court is the French court, the
plaintiffs are companies established in France for the Editions du Seuil company or
subsidiary of a French company for the other two, as well as stakeholders
volunteers empowered to defend the interests of authors and publishers of French
are of French nationality, that Google France has its headquarters in France, that
the domain name to access the site www.books.google.fr has an extension. "en"
and that this site is written in French ;
• it follows from all of these elements that France is the country having the closest
connection with the dispute, which justifies the application of French law contrary
to the contentions of the defendants;”
Columbia Pictures Industries Inc v Fung  2:06-cv-
05578-SVW-JC (C.D. Cal. May 20, 2010)
• What is the scope of the US Copyright Act to claims for infringement that
involves foreign elements?
• “this Permanent Injunction enjoins the conduct of Defendants wherever they
may be found, including without limitation in Canada.
• The Court further clarifies that this injunction covers any acts of direct
infringement, as defined in 17 U.S.C. § 106, that take place in the United
States. To the extent that an act of reproducing, copying, distributing,
performing, or displaying takes place in the United States, it may violate 17
U.S.C. § 106, subject to the generally applicable requirements and defenses
of the Copyright Act. As explained in the Court’s December 23, 2009 Order,
“United States copyright law does not require that both parties be located in
the United States. Rather, the acts of uploading and downloading are each
independent grounds of copyright infringement liability.”...Each download or
upload of Plaintiffs’ copyrighted material violates Plaintiffs’ copyrights if
even a single United States-based user is involved in the “swarm” process of
distributing, transmitting, or receiving a portion of a computer file
containing Plaintiffs’ copyrighted content.”
Banyan Tree Holding (P) Limited v Reddy CS (OS)
No. 894/2008 (H.C.Delhi. Nov. 23, 2009)
• “Question (ii): In a passing off or infringement action, where the
defendant is sought to be sued on the basis that its website is
accessible in the forum state, what is the extent of the burden on
the Plaintiff to prima facie establish that the forum court has
jurisdiction to entertain the suit?
• Answer: ... in order to show that some part of the cause of action
has arisen in the forum state by the use of the internet by the
Defendant the Plaintiff will have to show prima facie that the said
website, whether euphemistically termed as “passive plus” or
“interactive”, was specifically targeted at viewers in the forum state
for commercial transactions. The Plaintiff would have to plead this
and produce material to prima facie show that some commercial
transaction using the website was entered into by the Defendant with
a user of its website within the forum state resulting in an injury or
harm to the Plaintiff within the forum state.”
Sheppard & Anor, R v [2010] EWCA Crim 65 (29
January 2010) 
• Do domestic criminal laws apply when there are foreign elements?
• “The conduct the relevant provisions of the Act seek to prevent is the dissemination of
material intended or likely to stir up racial hatred...The reality is that, as expressed by
the judge, almost everything in this case related to this country... this is where the
material was generated, edited, uploaded and controlled. The material was aimed
primarily at the British public. The only "foreign" element was that the website was
hosted by a server in Torrance California and, as the judge observed, the use of the
server was merely a stage in the transmission of the material.”
• “The English Courts have decisively begun to move away from definitional obsessions
and technical formulations aimed at finding a single situs of a crime by locating where
the gist of the crime occurred or where it was completed. Rather, they now appear to
seek by an examination of relevant policies to apply the English criminal law where
a substantial measure of the activities constituting the crime take place in England,
and restricts its application in such circumstances solely to cases where it can seriously
be argued on a reasonable view that these activities should on the basis of
international comity not be dealt with by another country.” (emphasis added)
• For Canada, see Libman v. The Queen, [1985] 2 S.C.R. 178
 46

PRIVACY
PIPEDA Case Summary #2009-010 Report of Findings - Assistant 47
Commissioner recommends Bell Canada inform customers about
Deep Packet Inspection
• “At issue in the first place is whether any information that Bell is collecting or using for the
purposes of DPI can be considered personal information.”
• “We ascertained from our investigation that Bell assigns its subscribers a dynamic IP address
when a Sympatico subscriber connects to the network. Bell has indicated that it binds each
dynamic IP address to an invariable “subscriber id” that can be traced back to an individual
Sympatico subscriber. In this way, Bell can determine which Sympatico subscriber is
associated with a dynamic IP address at a given time. Given that Bell can link its Sympatico
subscribers, by virtue of their subscriber ID, with Internet activities (in this case, type of
application being used) associated with their assigned IP addresses, in my view, IP addresses in
this context are personal information.
• We have not seen any evidence to indicate that Bell can link IP addresses not associated with
Sympatico subscribers with an identifiable subscriber. Therefore, in the circumstances, Bell
cannot be said to be collecting or using personal information with respect to IP addresses
belonging to non-Sympatico subscribers.”
• “Bell’s answer to the question “What is Deep Packet Inspection (DPI) and what does it have to
do with Internet traffic management?”, located on its “Network management” web page is not
accurate. Our investigation revealed that through DPI, Bell collects IP addresses and can
associate them with a subscriber id for its own Sympatico subscribers; in my view, this is
“personal information”.”
Johnson et al. v. Microsoft Corp. (W.D. Wash., June 48
2009)
• IP addresses are NOT personally identifiable information.
• Microsoft’s EULA prohibits Microsoft from transmitting
“personally identifiable information” from the user’s
computer to Microsoft without the user’s consent.
• “In order for “personally identifiable information” to be
personally identifiable, it must identify a person. But an
IP address identifies a computer, and can do that only
after matching the IP address to a list of a particular
Internet service provider’s subscribers. Thus, because an
IP address is not personally identifiable, Microsoft did not
breach the EULA when it collected IP addresses.
Plaintiffs’ contract claim on that ground must fail.”
 49
EMI Records & Ors -v- Eircom Ltd,  [2010] IEHC 108 
• Is an IP address “personal data” under the Irish Data Protection Act 1988 which defines
“personal data” as “Data relating to a living individual who is or can be identified either
from the data or from the data in conjunction with other information that is in, or is likely
to come to into, the possession of the data controller.”
• The IP addresses collected by rights holders did not personally identify any living person
who is infringing their copyright.
• “Nothing in these provisions changes one basic fact. Neither DetectNet, or any similar
service of detection, nor any of the plaintiffs whose copyright material is being infringed
would ever know through this process that the infringer is a particular person living in a
particular place in Ireland. What they do know is that a particular IP address has been
involved in the downloading. An IP address is the number given to a computer from an
internet service provider when it receives internet access. The IP number electronically
identifies the user of the internet. Banks of numbers for IP addresses are produced by an
international organisation and these, in turn, are provided to internet service providers.
One can find out by looking at the IP number, I understand, who the internet service
provider is. What internet service provider is given what bank of thousands or millions of IP
numbers is not kept a secret anywhere. Since each internet service provider will have, in
turn, many thousands of customers, one is not moving much closer to finding out the
identity of an internet abuser by knowing the copyright infringing IP address was assigned
to that company. That number will probably give you no more than an indication of the
domicile of the computer...”
PIPEDA Case Summary #2009-013 Publisher collected and used 50
e-mail addresses for marketing without consent
• The complainant was perturbed by the number of unsolicited e-mails
he received from a publisher marketing a Canadian directory of
funding sources. Even when he asked the company to remove his
various e-mail addresses from its list, the company continued to send
him messages. For its part, the company contended that the
complainant’s business e-mail address was not personal information
and that, in any event, his e-mail addresses were publicly available.
• The addresses at issue in this complaint are business e-mail addresses.
Thus, pursuant to section 2, they are the complainant’s personal
information.
• The company asserted that, by putting one’s e-mail address on a web
site, one is making it available to the public. However, as the Assistant
Commissioner explained, this does not make it “publicly available” as
defined in the Regulations, nor does it follow that the individual has
given his or her implied consent to receiving marketing messages.
R. v. Cuttell, 2009 ONCJ 471 51

• Is subscriber information personal information?

• “The starting point for an assessment of the subscriber information in this case is that it
provided the link between Mr. Cuttell’s identity and some very personal details of his
lifestyle as revealed in his shared folder. As a result, I find that Mr. Cuttell did have a
reasonable expectation of privacy in his subscriber information.  
• In this case where there is no evidence of any contract or agreement regarding disclosure of
subscriber information between Bell and Mr. Cuttell, the reasonable expectation of privacy
remains.  It may be that in other cases, the police are able to determine that there is a
specific agreement between a subscriber and his or her ISP indicating that there is no
reasonable expectation of privacy for disclosure of certain information, and as such a police
request would not amount to a search.   This has to be determined on a case by case basis. 
• Whenever there is a reasonable expectation of privacy in this context, there is a search and
s.8 of the Charter applies. A warrantless search is presumed to be unreasonable. This
analysis is not altered by PIPEDA, nor does PIPEDA create a new search power.  Similarly,
where there is a reasonable expectation of privacy and the ISP acts as an agent of the state,
the police cannot shield their actions behind the third party’s consent and avoid Charter
scrutiny. 
• The search without a warrant for subscriber information in this case was unreasonable, and
as the Crown concedes, the subsequent warrant cannot be sustained.  I therefore find a
violation of s. 8 of the Charter.
Carter v. Connors, 2009 NBQB 317
• Do individuals have to disclose ISP and social network usage in
litigation?
• “The Respondent has claimed an individual privacy right with respect
to her general Internet use records as well as her social network use
records on the Internet social network site Facebook maintained by
her service provider Bell-Aliant.”
• “It is clear from these judgments that the success of an application to
retrieve an individual’s electronic computer data principally depends
upon the degree of intrusion into the private lifestyle choices and
electronic activity of the Internet user as well as the probative values
of the information sought.”
• A separate issue concerns the likelihood that third party privacy
rights may be affected by any disclosure. Third party privacy rights
are to be given special attention when those third parties are not
parties to the legal proceedings.”
Carter v. Connors, 2009 NBQB 317
• “In this instance I believe that the probative value of the information
requested is of such a level that its disclosure will not infringe upon a
reasonable expectation of privacy. That is so because the information
sought is not, at least at this stage of proceedings, information that could
qualify as revealing very personal information over which most right
thinking Canadians would expect a reasonable expectation of privacy.
Put another way, it does not reveal: ‘intimate details of the lifestyle and
personal choices of the individual.’”
• Having said that, it appears clear that this may be only the first of more
questioning by The Defendant’s counsel, Mr. Morrison, of the Plaintiff
with respect to her general Internet and specific Facebook usage at the
examination for discovery. If the questioning attempts to delve deeper
into the Plaintiffs lifestyle as it pertains to these subjects, relevancy and
privacy, it will require a re-examination of the reasonable limits of such
questioning. For example, included in that assessment will be the extent
to which an individual may claim a reasonable expectation of privacy in
the use of social networking site electronic data.” 
 54
Warman v. Fournier et al, 2010 ONSC 2126
• Issue is the test for disclosure of the identity of anonymous bloggers.
• “The fundamental premise of Norwich Pharmacal is that, where privacy
interests are involved, disclosure is not automatic even if the plaintiff
establishes relevance and the absence of any of the traditional categories
of privilege.” 
• Given the circumstances in this action, the motions judge was therefore
required to have regard to the following considerations: (1) whether the
unknown alleged wrongdoer could have a reasonable expectation of
anonymity in the particular circumstances; (2) whether the Respondent has
established a prima facie case against the unknown alleged wrongdoer and
is acting in good faith; (3) whether the Respondent has taken reasonable
steps to identify the anonymous party and has been unable to do so; and
(4) whether the public interests favouring disclosure outweigh the
legitimate interests of freedom of expression and right to privacy of the
persons sought to be identified if the disclosure is ordered.”
• See also, York University v Bell Canada Enterprises, 2009 CanLII 46447
(ON.Sup.Ct.)
Boring v Google Inc. 2010 WL 318281
(3rd .Cir.Jan 28, 2010)
• “To state a claim for intrusion upon seclusion, plaintiffs must allege
conduct demonstrating “an intentional intrusion upon the seclusion of
their private concerns which was substantial and highly offensive to a
reasonable person, and aver sufficient facts to establish that the
information disclosed would have caused mental suffering, shame or
humiliation to a person of ordinary sensibilities.”
• “No person of ordinary sensibilities would be shamed, humiliated, or
have suffered mentally as a result of a vehicle entering into his or her
ungated driveway and photographing the view from there... the privacy
allegedly intruded upon was the external view of the Borings' house,
garage, and pool-a view that would be seen by any person who entered
onto their driveway, including a visitor or a delivery man. Thus, what
really seems to be at the heart of the complaint is not Google's fleeting
presence in the driveway, but the photographic image captured at that
time. The existence of that image, though, does not in itself rise to the
level of an intrusion that could reasonably be called highly offensive.”
• Google liable for trespass for Street View, however.
EU Telecom Directive (October 22, 2009) 56
(“Cookie Directive”)
• Article 5(3) “Member States shall ensure that the storing of
information, or the gaining of access to information already stored,
in the terminal equipment of a subscriber or user is only allowed on
condition that the subscriber or user concerned has given his or her
consent, having been provided with clear and comprehensive
information, in accordance with Directive 95/46/EC, inter alia about
the purposes of the processing. This shall not prevent any technical
storage or access for the sole purpose of carrying out the transmission
of a communication over an electronic communications network, or as
strictly necessary in order for the provider of an information society
service explicitly requested by the subscriber or user to provide the
service.” (emphasis added)
• Applies to “storing of information, or the gaining of access to
information already stored, in the terminal equipment of a
subscriber”, i.e. cookies, spyware
 57
EU Telecom Directive (October 22, 2009)
(“Cookie Directive”)
• Recital 66 “Third parties may wish to store information on the equipment of a
user, or gain access to information already stored, for a number of purposes,
ranging from the legitimate (such as certain types of cookies) to those involving
unwarranted intrusion into the private sphere (such as spyware or viruses). It is
therefore of paramount importance that users be provided with clear and
comprehensive information when engaging in any activity which could result in
such storage or gaining of access. The methods of providing information and
offering the right to refuse should be as user-friendly as possible. Exceptions
to the obligation to provide information and offer the right to refuse should be
limited to those situations where the technical storage or access is strictly
necessary for the legitimate purpose of enabling the use of a specific service
explicitly requested by the subscriber or user. Where it is technically possible
and effective, in accordance with the relevant provisions of Directive 95/46/EC,
the user's consent to processing may be expressed by using the appropriate
settings of a browser or other application. The enforcement of these
requirements should be made more effective by way of enhanced powers
granted to the relevant national authorities.” (emphasis added)
• Will it apply to Canadian sites collecting information from EU residents?
 58
Behavioral Advertising
• Lots of action since FTC released Staff report: Self regulatory Principles for
Online Advertising (7 principles for online behavioral advertising) Feb 2009.
http://www.ftc.gov/os/2009/02/P085400behavadreport.pdf
• Self regulatory Principles for Online Advertising July 2009, produced by the
marketing-media industry and includes the American Association of Advertising
Agencies (AAAA), the Association of National Advertisers (ANA), the Direct
Marketing Association (DMA), and the Interactive Advertising Bureau (IAB), the
Council of Better Business Bureaus (BBB).
• The Principles apply to online behavioral advertising, defined as the collection
of data online from a particular computer or device regarding Web viewing
behaviors over time and across non-affiliate Web sites for the purpose of using
such data to predict user preferences or interests to deliver advertising to that
computer or device based on the preferences or interests inferred from such
Web viewing behaviors. The Principles do not apply to a Web site’s collection of
viewing behavior solely for its own uses. Contextual advertising also is not
covered by the Principles as it delivers advertisements based on the content of
a Web page, a search query, or a user’s contemporaneous behavior on the Web
site.
 59
PIPEDA Case Summary #2009-008 Report of Findings into the
Complaint Filed by CIPPIC against Facebook Inc (July 22, 2009)
• The complaint against Facebook by the Canadian Internet Policy and Public Interest Clinic
(CIPPIC) comprised 24 allegations ranging over 12 distinct subjects. These included default
privacy settings, collection and use of users’ personal information for advertising purposes,
disclosure of users’ personal information to third-party application developers, and
collection and use of non-users’ personal information.
• On four subjects (e.g., deception and misrepresentation, Facebook Mobile), the Assistant
Commissioner found no evidence of any contravention of the Act and concluded that the
allegations were not well-founded. On another four subjects (e.g., default privacy settings,
advertising), the Assistant Commissioner found Facebook to be in contravention of the Act,
but concluded that the allegations were well-founded and resolved on the basis of
corrective measures proposed by Facebook in response to her recommendations.
• On the remaining subjects of third-party applications, account deactivation and deletion,
accounts of deceased users, and non-users’ personal information, the Assistant
Commissioner likewise found Facebook to be in contravention of the Act and concluded
that the allegations were well-founded. In these four cases, there remain unresolved issues
where Facebook has not yet agreed to adopt her recommendations. Most notably, regarding
third-party applications, the Assistant Commissioner determined that Facebook did not
have adequate safeguards in place to prevent unauthorized access by application
developers to users’ personal information, and furthermore was not doing enough to ensure
that meaningful consent was obtained from individuals for the disclosure of their personal
information to application developers.
 60
Privacy Commissioner Letter to Google Inc.
Chief Executive Officer April 19, 2010
• “we are increasingly concerned that, too often, the privacy rights of
the world’s citizens are being forgotten as Google rolls out new
technological applications. We were disturbed by your recent rollout
of the Google Buzz social networking application, which betrayed a
disappointing disregard for fundamental privacy norms and laws. 
Moreover, this was not the first time you have failed to take adequate
account of privacy considerations when launching new services.”
• “Unfortunately, Google Buzz is not an isolated case. Google Street
View was launched in some countries without due consideration of
privacy and data protection laws and cultural norms. In that instance,
you addressed privacy concerns related to such matters as the
retention of unblurred facial images only after the fact, and there is
continued concern about the adequacy of the information you provide
before the images are captured.”
Google Analytics (Germany) 61

• German federal and state data protection

authorities say they may levy fines against
companies who use Google Analytics to gather
detailed usage stats without the explicit
consent of visitors.
• Possible €50,000 fine for violators.
• Will the Google user plug-in relieve Google of
liability?
• See, Achtung! Google Analytics is illegal, say
German government officials November, 2009.
Privacy Commissioner launches public consultations on emerging 62
technologies to focus on online tracking, profiling and targeting of
consumers by business (January 18, 2010)

• In the practice of online consumer tracking, data about the

browsing habits of individuals is collected through digital markers
such as cookies. Additional data may be gathered using other
technologies, such as deep packet inspection and the global
positioning systems (GPS) common in many mobile communications
devices.
• Individuals themselves, moreover, volunteer significant amounts of
personal information, especially through their participation in
social networking sites, such as Facebook, MySpace and LinkedIn,
and other popular web-based services such as foursquare.
• Personal data can be collated and mapped against other types of
information to generate detailed personal profiles. Such profiles
are valuable to marketers and other enterprises that want to target
products or services to people of a particular demographic or with
specific purchasing preferences.
 63
Office Privacy Commissioner and Cloud Computing

There are also privacy-specific issues inherent in the cloud

infrastructure: Jurisdiction, Creation of new data, Security, Data
intrusions, Lawful access, Processing, Misuse of data, Data
permanence, Data ownership Privacy Commissioner: Reaching for
the Cloud(s) (March 29, 2010)
Privacy Commissioner Notice of Consultation and Call for
Submissions on Cloud Computing (February 11, 2010) The aim of
this consumer consultation is to learn more about cloud computing
technology, explore its privacy implications, and find out what
privacy protections Canadians expect with respect to cloud
computing. The consultation is also intended to promote debate
about the impact of these technological developments on privacy,
and to inform the next review process for the Personal Information
Protection and Electronic Documents Act (PIPEDA).
Poliquin v. Devon Canada Corporation, 64
2009 ABCA 216 (Alta.C.A.)
• Can an employee be dismissed for cause because he or she uses an
employer’s computer and Internet access to view and transmit
pornographic and racist materials in violation of a company’s Code of
Conduct? 
“It is important to situate a document like the Code of Conduct in the
larger workplace context. Employers have the right to set the
ethical, professional and operational standards for their
workplaces. Doing so not only falls within an employer’s
management rights, it also constitutes an integral component of
corporate good governance. The workplace is not an employee’s
home; and employees have no reasonable expectation of privacy in
their workplace computers. It therefore follows that while
employers may permit employees limited personal use of workplace
computers, the employer is entitled to restrict the terms and
conditions on which that use may be permitted. Devon did just
that...” (emphasis added)
Poliquin v. Devon Canada Corporation, 65
2009 ABCA 216 (Alta.C.A.)
“In summary, an employee’s misuse of a workplace computer for
pornographic or racist purposes negatively affects an employer’s
professional, ethical and operational integrity. Employers are not required to
tolerate the misuse of their computers and Internet access any more than
they are required to put up with serious incidents of dishonesty by
employees. When an employee steals money from an employer, the theft and
resulting damage is at least confined to that employee. But where
dissemination of pornographic or racist material using the employer’s
computer or Internet access is concerned and especially where the
employee’s e-mail address includes the employer’s identity, this is not
necessarily so. In the information technology world today, e-mail can be
disseminated to many inside and outside an organization with the click of a
mouse. Accordingly, the harm done may well be far more serious and
pervasive. This reality substantially increases the risks to employers flowing
from the misuse of their equipment and Internet access for improper
purposes. For these reasons, an employer is entitled not only to prohibit
use of its equipment and systems for pornographic or racist purposes but
also to monitor an employee’s use of the employer’s equipment and
resources to ensure compliance.” (Emphasis added)
 66
Bill S-4: An Act to amend the Criminal Code (identity
theft and related misconduct) (in force Jan. 8, 2010)
• The amendment create several new Criminal Code offences specifically targeting
those aspects of identity theft that are not already covered by existing
provisions. Essentially, they focus on the preparatory stages of identity theft by
making it an offence to obtain, possess, transfer or sell the identity documents of
another person.
•  Illegally Possessing or Trafficking in Government Documents e.g., social
Insurance Number card, driver’s licence, health insurance card, birth certificate,
death certificate, passports.
• Use, trafficking, or possession of forged documents.
• Identity Theft and Identity Fraud: identity theft refers to the preliminary steps
(e.g., the collection and possession of another person’s identity information) and
identity fraud constitutes the subsequent deceptive use of such information in
connection with crimes like personation, fraud or abuse of credit card data.
 67
Bill S-4: An Act to amend the Criminal Code (identity theft
and related misconduct) (in force Jan 8, 2010)
• The amendments include a new definition of “identity information” and
establish three new offences that target the early stages of identity
theft:
• (a) obtaining and possessing identity information of another person with
the intent to use the information deceptively, dishonestly or
fraudulently in the commission of a crime;
• (b) trafficking in identity information of another person, an offence that
targets those who transfer or sell information to another person with
knowledge of or recklessness as to the possible criminal use of the
information; and
• (c) unlawful possession or trafficking of certain government-issued
identity documents relating to another person, either genuine or forged.
• These offences all carry a five year maximum term of imprisonment.
See, Order Fixing January 8, 2010 as the Date of the Coming into Force
of the Act, http://ow.ly/1IRQQ.
 68
Bill C-28 Fighting Internet and Wireless Spam Act

• Prohibits the sending of commercial electronic messages without

the prior consent
• Prohibits alteration of transmission data to route the message to
an unintended destination
• Prohibits installation or use of spyware in the course of
commercial activities (exceptions for cookies, html code, java
scripts and OSs)
• Amends the Competition Act to prohibit false or misleading
commercial representations made electronically
• Amends PIPEDA to prohibit the collection of personal information
by means of unauthorized access to computer systems in violation
of federal laws, and the unauthorized automated compiling of
lists of electronic addresses
BILL C-29 An Act to amend PIPEDA
• Excludes business contact information from being personal information.
• Specifies the elements of valid consent (“the consent of an individual is
only valid if it is reasonable to expect that the individual understands the
nature, purpose and consequences of the collection, use or disclosure of
personal information to which they are consenting”).
• Requires organizations to report material data breaches of personal
information to the Privacy Commissioner of Canada, and to notify
affected individuals when the breach poses a real risk of significant
harm, such as identity theft or fraud, or damage to reputation.
• Exceptions for prospective and completed business transactions such as
purchase of an organization or assets, M&A transactions, financings and
loans, taking security, lease or license transactions, other arrangements
to conduct a business activity.
• Organizations may collaborate with government institutions, such as law
enforcement and security agencies that have requested personal
information, in the absence of a warrant, subpoena, or order.
 70

Copyright
 71
SOCAN v. Bell Canada, 2010 FCA 123
• Scope of fair dealing exception for research on Internet.
• The word “research” in section 29 is not limited to  “scientific”,
“economic”, or “cultural” endeavours. 
• Research can include an activity in which a “consumer is searching for an
object of copyright that he or she desires and is attempting to locate and
wishes to ensure its authenticity and quality before obtaining it.”
• The Court agreed with the Board that “[l]istening to previews assists in
this investigation” and that the streaming of the previews was research
for a fair dealing purpose.
• The Court also accepted that on the evidence before it that the dealings
were also fair.
• See also, United States v. American Society of Composers, Authors and
Publishers, (In re AT&T Wireless), 599 F.Supp. 2d 415 (S.D.N.Y. 2009);
Video Pipeline v. Buena Vista Home Entertainment Inc. 342 F.3d 191
(3rd.Cir.)
Telstra Corporation Limited v. Phone Directories Company Pty 72
Ltd. [2010] FCA 44 (8 February 2010)
• Copyright in yellow and white pages directories.
• A claim of authorship in database can arise when a person (an author)
determines how a database will function and be expressed.
• The independent intellectual effort expected in making those determinations
might go to the originality of the particular form of expression of the work
(namely, the database).
• Telstra was unable to prove who the authors of the computer program it used
to compile the directories were or that it was the owner of the intellectual
property rights in the computer programs.
• It was also not proved that the individuals who had entered information in
the database had contributed anything which was original. All information
was dictated either by the computer programs used by Telstra, or by rules
which also dictated the information in the database.
• Telstra was also unable to establish authorship in the rules.
• Accordingly, Telstra was unable to claim any copyright in its databases by
virtue of either the computer programs or the rules and its copyright claim
failed.
RecordTV Pte Ltd v MediaCorp TV Singapore Pte Ltd 73

[2009] SGHC 287

• Whether for profit companies that operate Internet DVR services for
television programming are liable for copyright infringement.
• Who makes copies: Following the reasoning in Cartoon Network LP v CSC
Holdings Inc 536 F 3d 121 (2nd Cir 2008), the court held that “If the end-user
is the maker of this time-shifted recording for the purposes of the VCR, it
must remain that the end-user is the maker of the recording in the context of
the DVR, remote or local.”
• Who communicates the programs to the public: “The key question is this:
where exactly do the end-user’s volition and control cease to operate? ...
• The line, therefore, has to be drawn somewhere, and I think it sensible that
it be drawn once the end-user has properly exercised his volition in making a
choice. In other words, while I accept and have accepted that the end-user is
the one who has control over what programmes to record, the subsequent
transmission of that content would be effected by a process governed
entirely by the plaintiff.”
 74

Online File Sharing

Roadshow Films Pty Ltd v  iiNet  Limited (No. 3) [2010] 75
FCA 24 (4 February 2010)
• The court made a number of important rulings about the liability arising
from the use of BitTorrent networks.
• Seeders and peers that make music available for sharing are infringers
under Australia’s making available right.
• The transmission of copyright files as part of a BitTorrent swarm
constitutes a transmission (communication) to the public by participants
in the stream and is infringing.
• A peer that downloads a copyright file over an unauthorized BitTorrent
network infringes the reproduction right of the copyright owner.
• There can be liability for the transmission over a BitTorrent network even
if some part of the transmission occurs outside of Australia.
• Operators of BitTorrent sites are probably liable for copyright
infringement for having authorized infringement.
• An ISP that simply provides internet connectivity to subscribers does not
by that act alone authorize the subscriber’s infringing activity.
Twentieth Century Fox Film Corporation v. Newzbin Ltd., 76
[2010] EWHC 601 (Ch) (29 March 2010)
• English court found the operators of the Usenet Newzbin service to be liable
for organizing and making hyperlinks to movies available to premium
subscribers.
• The Court found liability based on authorizing acts of infringement by its
members, procuring, encouraging and entering into a common design with its
members to infringe, and communicating the claimants’ copyright works to
the public, namely, the defendants’ members.
“For all these reasons I am entirely satisfied that a reasonable member would
deduce from the defendant's activities that it purports to possess the
authority to grant any required permission to copy any film that a member
may choose from the Movies category on Newzbin and that the defendant has
sanctioned, approved and countenanced the copying of the claimants' films,
including each of the films specifically relied upon in these proceedings.”
“In all these circumstances, I believe the question I have identified admits of
only answer. The defendant has indeed procured and engaged in a common
design with its premium members to infringe the claimants' copyrights.”
Arista Records LLC v Usenet.com Inc. 91 USPQ2d 1744 77
(S.D.N.Y.2009)
• Operators of Usenet.com site found liable for directly
infringing the distribution right. “...contrary to
Defendants’ contentions, here their service is not merely
a ‘passive conduit’ that facilitates the exchange of
content between users who upload infringing content and
users who download such content; rather, defendants
actively engaged in the process so as to satisfy the
‘volitional-conduct’ requirement for direct
infringement.”
• Plaintiffs also successful in establishing liability for (1)
inducement of copyright infringement, (2) contributory
copyright infringement and (3) vicarious copyright
infringement.
 78
EMI Records & Ors -v- Eircom Ltd, [2010] IEHC 108
• “In dealing with this aspect of data protection entitlement, I feel I must return, for a moment, to some basic
principles of law. There is fundamental right to copyright in Irish Law. This has existed as part of Irish legal
tradition since the time of Saint Colmcille. He is often quoted for his aphorism: le gach bó a buinín agus le gach
leabhar a chóip (to each cow its calf and to every book its copy). The right to be identified with and to
reasonably exploit one’s own original creative endeavour I regard as a human right. Apart from legal
tradition, the rights now enshrined in the Copyright and Related Rights Act, 2000 were, under their previous
legislative incarnation, identified in Phonographic Performance Ireland Limited v. Coady, [1994] I.R. 504 by
Keane J. at 511 has having a pre-legislative origin and super-legislative effectiveness as part of the
unenumerated fundamental rights under the Constitution”..
• “The internet is only a means of communication. It has not rewritten the legal rules of each nation through
which it passes. It is not an amorphous extraterrestrial body with an entitlement to norms that run counter to
the fundamental principles of human rights. Since the early days of the internet, and increasingly as time has
gone on, copyright material has been placed on world wide web by those with no entitlement to share it. There,
it is downloaded by those who would normally have expected to pay for it. Among younger people, so much has
the habit grown up of downloading copyright material from the internet that a claim of entitlement seems to
have arisen to have what is not theirs for free.”
 79
EMI Records & Ors -v- Eircom Ltd,  [2010] IEHC 108
• “The courts under the Constitution are obliged to supply, even in the absence of
legislative intervention, appropriate remedies for the undermining of rights within
the scheme of fundamental law that the Constitution represents. As has often been
said, the powers of the courts in that regard are as ample as the Constitution
requires. I am therefore obliged by Constitutional imperative to protect, as best I
can, the rights of copyright owners from unjust attack or, where that sort of
attack has taken place, to vindicate their rights through an appropriate order.
There is ample expression of statutory remedies in the laws passed by the
Oireachtas under the Constitution. Section 37 of the Copyright and Related Rights
Act 2000 provides that the owner of the copyright in work has the exclusive right to
undertake or authorise others to make that work available to the public. This legal
entitlement is being flagrantly violated by peer-to-peer illegal downloading. I can
see no other way of looking at the problem. More than one of the conditions in s.2A
of the Data Protection Act, 1988 as amended is met as to both the legitimate
interests of Eircom, as a responsible company, and that of the community in
general. The most important of those interests is that of abiding by the law. It is
completely within the legitimate standing of Eircom to act, and to be seen to act, as
a body which upholds the law and the Constitution. That is what the court expects
of both individuals and companies. That expectation is derived from the rights
protected under the Constitution and the general pact which the people of Ireland
mutually made in founding a legal system, as the Preamble to the Constitution
clearly declares, that is dedicated to attaining true social order...”
Columbia Pictures Industries Inc v Fung  2:06-cv- 80

05578-SVW-JC (C.D. Cal. Dec. 21, 2009)

• Inducement: The argument that bittorrent sites like Isohunt are nothing but
content neutral search engines like Google was dismissed by the court holding
that “the evidence of Defendant’s intent to induce infringement is overwhelming
and beyond reasonable dispute”. This finding was backed up by detailed findings
about messages to users, assistance to users, and the implementation of technical
features, which were all intended to induce direct infringement by site users. The
court also found that the defendants’ business model depended on massive
infringing uses of the plaintiffs’ copyright materials.
• Territoriality “However, United States copyright law does not require that both
parties be located in the United States. Rather, the acts of uploading and
downloading are each independent grounds of copyright infringement liability.
Uploading a copyrighted content file to other users (regardless of where those
users are located) violates the copyright holder’s § 106(3) distribution right.
Downloading a copyrighted content file from other users (regardless of where
those users are located) violates the copyright holder’s § 106(1) reproduction
right… Accordingly, Plaintiffs need only show that United States users either
uploaded or downloaded copyrighted works; Plaintiffs need not show that a
particular file was both uploaded and downloaded entirely within the United
States.”
 81
Arista Records, LLC v Lime Wire Group  2010 WL
1914816 (S.D.N.Y.2010)
• There was “overwhelming evidence that LimeWire engaged in purposeful conduct that
fostered infringement” to support liability based on inducement. 
• “LimeWire has engaged in purposeful conduct that fostered infringement, with the
intent to foster such infringement. LimeWire  distributes its software LimeWire, and (1)
is aware that LimeWire’s users commit a substantial amount of copyright infringement;
(2) markets LimeWire to users predisposed to committing infringement; (3) ensures that
LimeWire enables infringement and assists users committing infringement; (4) relies on
the fact that LimeWire enables infringement for the success of its business; and (5) has
not taken meaningful steps to mitigate infringement.”
• The court found LimeWire vicariously liable the infringements of its users based on
substantial evidence that LimeWire “had the right and ability to limit the use of its
product for infringing purposes, including by (1) implementing filtering; (2) denying
access; and (3) supervising and regulating users.”
 Sony BMG  Music Entertainment v Tenenbaum, 2009 WL 82
4547019 (D.Mass. Dec 7, 2009).

• The defendant “mounted a broadside attack that

would excuse all file sharing for private enjoyment.”
He argued that all a defendant needs to show is that he
did not make money from the files he downloaded or
distributed-i.e., that his use was “non-commercial”.
• “It is a version of fair use so broad that it would
swallow the copyright protections that Congress
created, defying both statute and precedent.”
• Court held that allowing fair use for any non-
commercial file sharing would be harmful to rights
holders and undermine legitimate markets for sound
recordings. 
BREIN v MININOVA. B.V., DISTRICT COURT OF UTRECHT, 83
26 August 2009
• The District Court:
• “5.1. issues a declaratory judgment that Mininova is acting unlawfully by
enabling, inducing and profiting from infringements of the copyrights and
neighbouring rights of the entitled parties affiliated with Brein;
• 5.2. orders Mininova to take such measures within three months after the service
of this judgment to ensure that no torrent links are offered on its platform
regarding which there should be a valid doubt as to whether they contain
copyrighted works or works protected by neighbouring rights, the disclosure of
which has not been authorised by the entitled parties;
• 5.3. orders that if, after three months after the service of this judgment, torrent
links are offered on Mininova’s platform, the titles of which are identical or
similar to titles of works appearing on a list of titles of copyrighted works or
works protected by neighbouring rights provided by Brein... Mininova will incur a
penalty of EUR 1,000 to Brein for each automatic reference to such an infringing
file or per day that such a reference is offered, such at the discretion of Brein,
at a maximum of EUR 5,000,000.00;”
Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc. 84
(N.D. Cal. March 19, 2010)
• A service provider was given notices of direct infringement
occurring on dozens of websites hosted on the defendants’
servers.
• The hosting provider forwarded the notices to its customers
but these were ignored. The hosting provider was sued for
contributory infringement and was found liable.
• The court distinguished the liability of service providers
which do not own or operate equipment and those service
providers that do. In those cases, according to the court, if
the operator learns of specific infringing material available
on its systems and fails to purge such material, the operator
knows of and contributes to direct infringement.
 85

Other IP Cases
Autodesk, Inc v Dassault Systems Solidworks Corp.
2009 WL 5218009 (N.D.Cal. Dec. 31, 2009)
• “No one has ownership of file extension designations under the Lanham Act because such
designations are inherently functional. Any programmer or computer user anywhere is free to
designate file extensions as they see fit, without worrying about trademark violations. File
extensions are functional, and functional uses cannot be trademarked. To rule otherwise
would invite a clog on commerce, given the millions of software applications. The limited
universe of extension permutations would soon be encumbered with claimants and squatters
purporting to own exclusive rights to file extensions.”
• “the primary purpose of a file extension is to tell the computer the type of the file it is
handling. A computer is not a consumer. Its “reading” of the file extension is not in
connection with a commercial transaction. It doesn't care who made the file format it is trying
to read. Whether the proper terminology for this use is a “functional use” or “non-trademark
use,” a file extension is not actionable under trademark law.”
• “This remains true even if computer users associate a particular file extension with a
particular manufacturer (e.g. “.xls” with Microsoft, “.pdf” with Adobe, or for argument's sake,
“.dwg” with Autodesk). While there is no question that a file extension could serve a
tangential purpose of communicating the source of the file or file format, this effect-in the
vast majority of instances-would be incidental. The primary function of a file extension to
both a computer and its user is to identify a file or file type. Even if the function were solely
to identify the format in which the contents are stored, that would still be a functional use.
Functional uses are not protected under trademark law.”
Tiffany (NJ) Inc. v eBay Inc. 600 F.3d 93
(2nd .Cir.2010)
• “eBay appears to concede that it knew as a general
matter that counterfeit Tiffany products were listed
and sold through its website...Without more, however,
this knowledge is insufficient to trigger liability under
Inwood. The district court found, after careful
consideration, that eBay was not willfully blind to the
counterfeit sales. That finding is not clearly erroneous.
eBay did not ignore the information it was given about
counterfeit sales on its website.”
• See, also L’Oreal SA v eBay International AG [2009]
EWHC 1094 (Ch) ) 22 May 2009)
Tiffany (NJ) Inc. v eBay Inc. 600 F.3d 93
(2nd .Cir.2010)
• “It is true that eBay did not itself sell counterfeit Tiffany goods; only the
fraudulent vendors did, and that is in part why we conclude that eBay did not
infringe Tiffany's mark. But eBay did affirmatively advertise the goods sold through
its site as Tiffany merchandise. The law requires us to hold eBay accountable for
the words that it chose insofar as they misled or confused consumers.
• eBay and its amici warn of the deterrent effect that will grip online advertisers
who are unable to confirm the authenticity of all of the goods they advertise for
sale...We rather doubt that the consequences will be so dire. An online advertiser
such as eBay need not cease its advertisements for a kind of goods only because it
knows that not all of those goods are authentic. A disclaimer might suffice. But the
law prohibits an advertisement that implies that all of the goods offered on a
defendant's website are genuine when in fact, as here, a sizeable proportion of
them are not.”
Google France v Louis Vuitton Malletier, Official
Journal of the European Union 22.5.2010
• “Article 5(1)(a) of First Council Directive 89/104/EEC of 21 December 1988 to
approximate the laws of the Member States relating to trade marks and Article
9(1)(a) of Council Regulation (EC) No 40/94 of 20 December 1993 on the
Community trade mark must be interpreted as meaning that the proprietor of a
trade mark is entitled to prohibit an advertiser from advertising, on the basis of a
keyword identical with that trade mark which that advertiser has, without the
consent of the proprietor, selected in connection with an internet referencing
service, goods or services identical with those for which that mark is registered,
in the case where that advertisement does not enable an average internet user,
or enables that user only with difficulty to ascertain whether the goods or
services referred to therein originate from the proprietor of the trade mark or an
undertaking economically connected to it or, on the contrary, originate from a
third party.”
• “An internet referencing service provider which stores, as a keyword, a sign
identical with a trade mark and organises the display of advertisements on the
basis of that keyword does not use that sign within the meaning of Article 5(1)
and (2) of Directive 89/104 or of Article 9(1) of Regulation No 40/94.”
Silvaco Data Systems v. Intel Corp. 2010 WL 1713241 90

(Cal.App. 6 Dist.2010)
• “One clearly engages in the “use” of a secret, in the ordinary sense, when
one directly exploits it for his own advantage, e.g., by incorporating it into
his own manufacturing technique or product. But “use” in the ordinary sense
is not present when the conduct consists entirely of possessing, and taking
advantage of, something that was made using the secret. One who bakes a
pie from a recipe certainly engages in the “use” of the latter; but one who
eats the pie does not, by virtue of that act alone, make “use” of the recipe in
any ordinary sense, and this is true even if the baker is accused of stealing
the recipe from a competitor, and the diner knows of that accusation. Yet
this is substantially the same situation as when one runs software that was
compiled from allegedly stolen source code. The source code is the recipe
from which the pie (executable program) is baked (compiled). Nor is the
analogy weakened by the fact that a diner is not ordinarily said to make
“use” of something he eats. His metabolism may be said to do so, or the
analogy may be adjusted to replace the pie with an instrument, such as a
stopwatch. A coach who employs the latter to time a race certainly makes
“use” of it, but only a sophist could bring himself to say that coach “uses”
trade secrets involved in the manufacture of the watch.”
Silvaco Data Systems v. Intel Corp. 2010 WL 1713241 91

(Cal.App. 6 Dist.2010)

“Strong considerations of public policy reinforce the common-sense

conclusion that using a product does not constitute a “use” of trade
secrets employed in its manufacture. If merely running finished
software constituted a use of the source code from which it was
compiled, then every purchaser of software would be exposed to
liability if it were later alleged that the software was based in part upon
purloined source code. This risk could be expected to inhibit software
sales and discourage innovation to an extent far beyond the intentions
and purpose of CUTSA. We therefore decline to hold that under the
circumstances alleged and shown here, the mere execution of a
software product constitutes “use” of the underlying source code for
purposes of a misappropriation claim”.
Patents

•Bilski?
•Amazon?
Slides available @barrysookman.com
and mccarthy.ca
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