Canadian Internet Law Update - 2010

This paper summarizes selected developments in Internet law that occurred in 2010. In this brief update, it is impossible to present more than an overview of significant developments in several representative areas of Internet law. Reference to current legislation, regulatory policies and guidelines, and case law is essential for anyone addressing these issues in practice.

A. Intellectual Property and the Internet

1. Trade-marks

   1. Mortgagebrokers.com Holdings Inc. v. Mortgage Brokers City Inc. – Injunction to Restrain Use of Domain Name Refused

      Mortgagebrokers.com Holdings Inc. v. Mortgage Brokers City Inc., 2010 ONSC 1797, involved a trademark dispute between competing mortgage brokers that were previously affiliated. The plaintiff claimed that the defendants' use of the MORTGAGE BROKERS OTTAWA & Design trade-mark and the mortgagebrokersottawa.com domain name infringed the plaintiff's MORTGAGE BROKERSOTTAWA.COM & Design trade-mark and its mortgagebrokers.com domain name. The plaintiff applied for an interlocutory injunction restraining the defendants from using the mortgagebrokersottawa.com domain name. The defendants maintained that their use of the MORTGAGEBROKERSOTTAWA.COM & Design brand was lawful, and further stated the intention to redesign their website to eliminate any resemblance to the plaintiff's website. The court refused to grant the injunction on various grounds, including the plaintiff's unclean hands (due to an unjustified withholding of commissions owned to defendants), the plaintiff's failure to prove irreparable harm, and the balance of convenience, which favoured allowing the defendants to continue to use the domain name.

   2. Private Career Training Institutions Agency v. Vancouver Career College (Burnaby) Inc. – Injunction to Restrain Keyword Advertising Refused

      Private Career Training Institutions Agency v. Vancouver Career College (Burnaby) Inc., 2010 BCSC 765, involved a dispute over the use of trade-marks and trade names as keywords for Internet advertising. The Agency, the regulatory body for career training institutions in B.C., applied for a permanent injunction restraining Vancouver Career College from using its competitors' business names as keywords for Internet advertising, which the Agency claimed constituted misleading advertising prohibited by the Agency's bylaws. The court dismissed the application, on the basis that the keyword advertising was not false, deceptive or misleading, and in fact was beneficial to Internet users because it provided them with alternative offerings. The court reasoned that the keywords resulted in advertisements that were clearly identified as "sponsored links" that were distinguishable from organic search results. The court accepted the College's argument that keyword advertising is no different than the time-honoured and generally accepted marketing practice of a business locating its advertisement close to a competitor's telephone number in the same directory, so that potential customers of that competitor discover there is another business offering a similar product or service. The court found that the two students who claimed to have been misled by the College's advertisements had been careless.

2. The Canadian Internet Registration Authority Dispute Resolution Policy

   1. Overview

      Certain disputes involving alleged bad faith registration of .ca domain names can be resolved by arbitration pursuant to the Domain Name Dispute Resolution Policy (the "CDRP") mandated by the Canadian Internet Registration Authority ("CIRA"). The CDRP's mandatory administrative dispute resolution process is binding on .ca domain name registrants because it is incorporated by reference into .ca domain name registration agreements. The CDRP is modeled on the Uniform Domain Name Dispute Resolution Policy (the "UDRP") mandated by the Internet Corporation for Assigned Names and Numbers and applicable to .com, .org, .net and other domain names. However, the CDRP contains certain provisions that are distinctly Canadian and are designed to improve upon the UDRP in light of its interpretation and practical application.

      A complainant must satisfy the CIRA Canadian presence requirements for registrants in respect of the domain name that is the subject of the proceeding or be the owner of the trade mark registered in the Canadian Intellectual Property Office that is the basis of the complaint. A complainant must prove: (i) the disputed domain name is confusingly similar to a mark in which the complainant had rights prior to the date of registration of the domain name and continues to have such rights; (ii) the registrant has no legitimate interest in the domain name; and (iii) the registrant registered the domain name in bad faith. The CDRP provides detailed and exhaustive definitions of each required element.

   2. CDRP Decisions

      There were 19 CDRP decisions, involving 21 domain names, issued during 2010. A complete list is available at www.cira.ca. Complaints continue to be upheld more frequently than they are dismissed. During 2010, 14 orders were made requiring that domain names be transferred to complainants, while 7 orders were made dismissing complaints.

      The 2010 CDRP decisions highlight five noteworthy issues:

      The CDRP is limited in scope, and will not apply to all disputes relating to domain names: Warren Miller Entertainment Inc. v. Willi Vogl & Associates Ltd., CIRA No. 159; Toyota Canada Inc. v. Sproul, CIRA No. 152; Vancouver Community College v. Eminata Group, CIRA No. 148. A complaint will fail if it is not supported by sufficient evidence for each required element of the CDRP: AM Ford Sales Ltd. v. Canada One Auto Group, CIRA No. 158; AOL Canada Inc. v. Anderson, CIRA No. 157. The fact that a domain name registrant expressly or implicitly invited a complainant to make an offer to purchase or rent a domain name is evidence that the domain name was registered primarily for the purpose of selling it to the complainant: DKH Retail Limited v. Facciolo, CIRA No. 155; Carlton University Students Association Inc. v. Essiambre, CIRA No. 153; Microsoft Corporation v. Guo, CIRA No. 143; Zuffa LLC v. Cox, CIRA No. 161. The addition of generic terms will not distinguish a domain name from a trade-mark: LEGO Juris A/S v. Carswell, CIRA No. 150; Microsoft Corporation v. Guo, CIRA No. 143. There continues to be inconsistency regarding the appropriate test for confusing similarity between the complainant's trade-mark and the disputed domain name. Some panels appear to apply a standard contextual confusion test (AM Ford Sales Ltd. v. Canada One Auto Group, CIRA No. 158; LEGO Juris A/S v. Carswell, CIRA No. 150; and The Hospital for Sick Children v. Toronto Sick Children Society, CIRA No. 145) while other panels apply a test of mistake based upon first impression and imperfect recollection (DKH Retail Limited v. Facciolo, CIRA No. 155; Microsoft Corporation v. Guo, CIRA No. 143; and Fitness Anywhere Inc. v. Bannerfrench, CIRA No. 160). 3. Copyright

   1. Shaw Cablesystems G.P. v. Society of Composers, Authors and Music Publishers of Canada – Online Streaming is "Communication of the Work to the Public"

      Shaw Cablesystems G.P. v. Society of Composers, Authors and Music Publishers of Canada, 2010 FCA 220, involved an application by several Internet service providers ("ISPs") for judicial review of a Canadian Copyright Board decision (known as the SOCAN Tariff 22A decision) regarding the application of a copyright tariff to Internet music downloads. The ISPs appealed the Board's decision that the transmission of a musical work by an online music service was a "communication of the work to the public by telecommunication" within the meaning of Copyright Act s. 3(1)(f). The ISPs argued that a communication "to the public" required a simultaneous transmission of the same music file to different members of the public, and therefore a music download by an individual was a private communication that was not subject to the tariff. The court upheld the Board's decision, reasoning that simultaneity is not required, and that whether or not a communication is "to the public" was a function of only two factors: the intention of the communicator to communicate to the public, and the reception of the communication by at least one member of the public. The court held that the communicator's intention could be inferred from the circumstances, including the volume of transmissions and the context in which they were made, but noted that volume of transactions, in and of itself, did not transform private communications into communications to the public. The court also held that if there is an intention to communicate a work to the public, then every communication of the work, starting with the first, is a communication to...