If you came to a restaurant and asked if they could make a good steak for you, and the waitress told you that they’re not sure but they are sure going to try very hard – what are the odds you would order it?
If you asked the waitress how much the steak is going to cost, and she told you that it costs $10 to place it on the grill and then the chef is going to charge you by the minute depending on how difficult it is to cook it to the perfect temperature – how likely would you be to order it?
If – not being convinced that they are any good at steaks – you then asked the waitress if they would offer you a refund if the steak would not come out right, and told you that there would be no refunds because they would have invested a lot of time, products and effort trying to the best of their abilities – would you ever order it from that place?
Below is a typical response that a business owner would receive from the vast majority of law firms and trademark agents in Canada to the question how much it would cost to register a trademark in Canada and whether or not the firm would provide any guarantees:
With regard to approximate costs, we attach a copy of our latest Schedule of Fees for your reference. For your convenience, we highlight the approximate costs of preparing and filing a single trademark application as $XXX plus official fees of $XXX. If the trademark application proceeds directly to allowance, the fees applicable to registration of the trademark application will be about $XXX plus official fees of $XXX.
If an adverse examination report is issued during examination, we will docket such response and report to you with our recommendations to overcome the objections raised in the adverse report as well as the approximate costs. The prosecution costs for the matter will vary depending on the nature of the objections raised and the hourly rate of the lawyer preparing the response. The writer’s hourly rate is $XXX. The approximate cost of reporting to you will be from $XXX. Complex objections requiring submission of evidence are subject to highly variable cost.
Most applications take 14 – 18 months from the date of application to achieve registration if there are no significant delays, but if the application is ultimately unsuccessful, we do not offer a refund.
No wonder most business owners are terrified of registering their trademarks in Canada. A low-cost application fee is simply a bait to get the customer in the door to then bill and bill until the application is either registered or refused. What business owner would not agree to pay a few extra hundred dollars after investing a thousand already? And then just another few extra hundred dollars here and there?
Don’t believe me? Call any law firm in Canada and ask two questions:
1. Can you guarantee a fixed flat rate that would cover the entire process from start to finish, including responses to all office actions that may be issued during the process?
2. Do you guarantee that the trademark will be registered, and if the application is ultimately unsuccessful, will I get my money back?
Now compare their response with the answer you will receive from the Trademark Factory:
We charge a flat rate of $2,000 + tax + government fees for one trademark application in Canada (the total comes to $2,690). This amount covers everything from the initial search of registered trademarks, drafting and filing the trademark application to unlimited follow-up correspondence with the Trademarks Office, responding to all office actions, filing the declaration of use, and obtaining the registration certificate.
We guarantee that the Canadian Intellectual Property will approve your trademarks. Otherwise, you get all of your money back, including the fees you paid to the government.
If you use a remarkable name, logo or tagline for your business, the Trademark Factory™ is the perfect solution to register them as trademarks in Canada.
Often, I get requests to draft a simple agreement whereby the business owner who paid or is about to pay for some content created specifically for that business would own copyright in what they pay for.
Just today, I got a call from an existing client. They hired a videographer to create videos for their business. Now the videographer is claiming that my client does not own copyright in the videos. However surprising this may be to most people, the videographer is correct, at least from the legal standpoint.
Unless there is an assignment of copyright in writing, the copyright remains with the person who created the work, in this case, the videos.
Often, the client’s situation does not justify hiring a lawyer to create a completely customized agreement.
So I decided to share the template that I developed as a result of many years of writing these agreements in different jurisdictions.
If you hired someone to create content for you or you are about to hire someone to create content for you and you don’t have a budget to document the transfer of intellectual property from your contractor to you, you should definitely check out these templates. They may not ideally fit your situation and are not offered as legal advice, but in my experience, they should take care of 90% of the situations that usually arise around such facts.
This is where you can download standard Content Creation and Copyright Assignment templates at a fraction of what it would cost you to have a lawyer draft a customized contract. Check out the previews and see for yourself that the level of details covered in these templates greatly exceeds anything that you can download for free on the Internet.
Hoping that this will be of value to you.
This is a repost of my article that I co-wrote with Robbie Fleming in April of 2011. It was originally published in The Advocate.
Anyone who is familiar with the internet knows that when you do a search you get some results that are advertising.
The way this works is that an advertiser pays Google to post the advertiser’s ad whenever a particular keyword is searched for. When a user next types that keyword into Google, the advertiser’s ad will be displayed at the top of the search results, or sometimes on the right-hand margin of the page.
Does this mean that you can use your competitor’s brand as a keyword so that customers looking for your competitor will find you first?
Courts in California and British Columbia have both answered this question in the last few months, and have come to very different conclusions.
In Binder v. Disability Group, Inc.1., the plaintiffs and defendants were in competition for US social security disability claimants, whom they both wanted to provide services to. The defendants advertised their services on Google, and some of their chosen keywords were the trademarks of the plaintiffs. The plaintiffs sued for statutory trademark infringement and the common law tort of unfair competition, which is broadly similar to the tort of passing off in Canada.
US District Judge King wrote:
“…there was a strong likelihood of confusion. Plaintiffs’ mark and that used by Defendants [as a keyword] are identical – both are Plaintiffs’ registered trademark of “Binder and Binder”. We find that Plaintiffs’ marks are strong based on testimony that Plaintiffs’ extensively marketed and advertised their services and worked to build their reputation based around their name….
The services provided are identical – both Plaintiffs and Defendants are competing for clients for social security disability cases. Defendants intentionally chose Plaintiffs’ mark based on its strength and appeal in the market. Additionally, both Plaintiffs and Defendants market their products through the Internet and rely upon it to obtain clients.”
The judge found that the infringement of the plaintiffs’ trademarks was a willful violation of the plaintiffs statutory and common law rights, and awarded double damages plus reasonable attorneys’ fees and costs against the defendants.
British Columbia Decision
In Private Career Training Institutions Agency v. Vancouver Career College2., the BC Court of Appeal considered similar issues.
The plaintiff was the local regulator responsible for private colleges, and passed the following bylaw:
“An institution must not engage in advertising or make a representation that is false, deceptive or misleading. Deceptive advertising includes but is not limited to an oral, written, internet, visual, descriptive or other representation that has the capability, tendency or effect of deceiving or misleading a consumer”.
However, some of the colleges advertised their programs on Google using the names of their competitors as keywords. Just as in the California case, these colleges did not pretend that they were their competitors, but they used their competitors’ brands to direct consumer traffic to their own websites instead.
The BC regulator asked the colleges to stop, and when they refused the regulator went to court for an injunction to force them to stop. Unfortunately for the regulator, Mr. Justice Gaul concluded there was nothing wrong with the use of a competitor’s brand as a keyword:
“I find [the defendant’s] advertising program, including its use of Keyword Advertising that incorporates the names of competitor institutions, was not designed to mislead anyone. The two situations of what the [petitioner] says were students who were deceived by [the defendant’s] advertising are, in my opinion, actually examples of students who made mistakes and it was their own actions or inactions that prompted the errors. Had they been more cautious in their reviews of their search results they would have realized that they were looking at a website of an institution other than the one they were initially seeking.
In my opinion, [the defendant’s] internet advertising strategy provided [two students who actually got misled by the advertisement] with the opportunity to investigate and consider other institutions besides the ones they were looking for. Not only do I find there is nothing wrong with that, I think the option to examine a number of institutions offering similar educational programs is a good one for the consumer.”
Accordingly, Mr. Justice Gaul dismissed the regulator’s application for an injunction.
The Court of Appeal upheld Gaul J.’s decision and found that that there was no reasonable grounds to believe that using a keyword to place one colleges’ website in a higher priority on Google than it would otherwise deserve, “was misleading or likely to mislead”.
The Court of Appeal went out of its way to say that the case was not about trademarks or intellectual property, but if Private Career Training was not about IP it is difficult to see what it was about.
It’s hard to see a difference between the Bylaw’s prohibition on advertising that has the “capability… of deceiving or misleading a consumer” and the common law passing off requirement that a defendant’s conduct creates a “likelihood of confusion” – if anything the test in the Bylaw appears less stringent than the common law.
The essence of an action for trademark infringement or passing off is free riding on the goodwill or reputation of another. While in a classic case a defendant is found to be passing off if he is claiming that his goods are the plaintiff’s, in recent years courts have expanded this concept to include more imaginative attempts to exploit someone else’s good reputation. So an Irish distiller cannot claim to be making “scotch whiskey”, and one video store cannot put a competitor’s sign on the highway in order to divert traffic to themselves.
This latter situation was considered by the US Ninth Circuit Court of Appeals Brookfield Communications Inc. v. West Coast Entertainment Corp.3.:
“Using another’s trademark in one’s metatags is much like posting a sign with another’s trademark in front of one’s store. Suppose West Coast’s competitor (let’s call it “Blockbuster”) puts up a billboard on a highway reading – “West Coast Video: 2 miles ahead at Exit 7” – where West Coast is really located at Exit 8 but Blockbuster is located at Exit 7. Customers looking for West Coast’s store will pull off at Exit 7 and drive around looking for it. Unable to locate West Coast, but seeing the Blockbuster store right by the highway entrance, they may simply rent there. Even consumers who prefer West Coast may find it not worth the trouble to continue searching for West Coast since there is a Blockbuster right there. Customers are not confused in the narrow sense: they are fully aware that they are purchasing from Blockbuster and they have no reason to believe that Blockbuster is related to, or in any way sponsored by, West Coast. Nevertheless, the fact that there is only initial consumer confusion does not alter the fact that Blockbuster would be misappropriating West Coast’s acquired goodwill.”
In Private Career Training, Mr. Justice Gaul concluded that the accused colleges did not use their competitor’s name in their metatags, but it is difficult to see how using the brands in Google adwords is any different – both are tools in which the power of a competitor’s brand is used against it to steer consumer traffic away from the competitor and on to the advertiser’s competing site.
Both Mr. Justice Gaul and the Court of Appeal in Private Career Training concluded that no consumer was ultimately mislead by the use of brands as keywords, because the offending colleges did not pretend to be anything other than themselves in either their ads or their websites, and so any reasonably intelligent consumer clicking on the ‘wrong’ website would have eventually discovered their mistake:
“… the decision to spend thousands of dollars and several years on a course of education was very important. It was reasonable to expect that potential students would approach the issue with some care.”
But this analysis presumes that end point is the only relevant point of analysis. It ignores the fact that the offending colleges were using their competitor’s brand as a springboard to direct initial inquiries to themselves (“initial interest confusion” as in Brookfield), and it also appears inconsistent with the common law passing off likelihood of confusion test, as formulated in Veuve Clicquot4.:
“The test to be applied is a matter of first impression in the mind of a casual consumer somewhat in a hurry who sees the name Cliquot on the respondents’ storefront or invoice, at a time when he or she has no more than an imperfect recollection of the VEUVE CLICQUOT trade-marks, and does not pause to give the matter any detailed consideration or scrutiny, nor to examine closely the similarities and differences between the marks.”
Of course the courts in Private Career Training were not considering trademark infringement but the application of consumer protection legislation, and with this idea firmly in mind the Court of Appeal concluded that trademark principles were irrelevant to their analysis.
In fairness to the Court of Appeal, consumer protection legislation has a different purpose than intellectual property laws. IP protects the rights of the intellectual property owners, and so concepts like initial interest confusion matter because any free riding on a business’ brand matters. But consumer protection laws are mostly about final effects – will any consumer be harmed? From this perspective the Court of Appeal’s focus on the final impact of the use of the brand keywords instead of the initial impact is more understandable. However, even this distinction is questionable because of the authority in Canada that consumer protection is one of the fundamental purposes of the tort of passing off: Ciba-Geigy Canada v. Apotex  SCJ 83 at paras 48 to 50.
In any event, whether Private Career Training is about intellectual property or consumer protection is not as significant as the fact that it is the first case in Canada to consider the use of brands in keyword advertising. Because it is the first, and because of its conclusion, this case will be seen by many as an invitation to challenge well established incumbents in the market place by bidding on those incumbents’ own brands on Google adwords. The stronger those brands, the more vulnerable they will be to internet-savvy competitors entering their markets without any brand power of their own.
Unless you create your websites yourself, there are many ways to find someone else who would do it for you.
You may hire an established company with an army of designers, programmers, copywriters and artists; you may crowdsource the job; you may find someone who will do it as inexpensively as it gets through websites like FIVERR.COM; you may use templates; you may ask a friend, a co-worker or an employee.
For simplicity’s sake, by “web design” I will be referring to the combination of graphic design, interface design, HTML coding, database programming and scripting, in other words, everything that is involved in creation of modern websites.
This post is not about what makes a good web designer. It assumes that you have found someone who can do the job according to your liking and your budget. This post focuses on issues that you must consider before having someone design a website for you.
I. Who Will Own It?
Just because you paid to have your website designed, does not mean that you own copyright in it.
According to Canadian Copyright Act, it is the person who actually created the work that is the author of the work. The author of the work is also the first owner of copyright in the work, unless the author happens to have created the work in the course of employment, in which case it is the employer who is the first owner of copyright.
Unless a true employment relationship exists between you and the web designer and the creation of the design is within employment duties of the employee, the only way for you to obtain property interest in the copyright to what the designer creates is to enter into a written assignment or license agreement with the copyright owner. Otherwise, the copyright will remain with the designer or his employer. At best, you will be said to have acquired a nonexclusive license to use the design. The scope of the license will be limited to simple use, which may or may not include further alterations by you or a third party.
This means that the website is not your asset, it is not something that you can offer an investor to buy a share of.
Unless the website has absolutely no value to you and you can quickly replace it without using any of the elements of the old design in your new design, always make sure that you have a written agreement with the web designer assigning all rights in the design to you.
This will also ensure that the designer will not have a legal right to “design” the same website for somebody else.
While the agreement does not necessarily have to be printed and signed, it is still the preferred way of documenting contractual relationships. If you should need to enter into the agreement over email, make sure you can properly identify the other party to the transaction.
II. Did the designer really create it?
Make sure that web designer does not use other people’s content without proper authorization.
Unauthorized use of images, scripts, commercial fonts or content will likely infringe copyright of someone who created them. And if you have a successful business, it is you (or your company), not the web designer, that will be sued if the copyright owner decides that you have enough money to go after.
Your contract with the designer should include a provision that would disallow the use of third-party content other than with your prior approval.
It should also contain indemnification provisions. In other words, the designer must undertake to compensate you for any losses that you may incur if you get sued by someone whose works the designer used for your website.
A different side of the same issue is when you enter into a contract with a company, rather than an individual. You need to make sure that the company has properly contracted with all humans who are going to take part in development of your web design. These may be employees, independent contractors or outsourced force. The goal is to make sure that the company indemnifies you if you are sued by these individuals claiming that they have not properly transferred their copyright to the company that you contracted with.
Remember, you cannot tell the copyright owner to sue the party that you dealt with. It is you (or your company) that is using the work without permission. It is you (or your company) that will get sued. All you can do is request compensation from the party that you dealt with. This is one of the few problems with outsourcing work to someone in distant jurisdictions. If you get sued, it is very unlikely that you will be able to recover your money from someone in Pakistan whom you have never met.
III. What are you allowed to do with the design?
Unless you are prepared to be stuck for life with the same designer, make sure you have the right to hire others to modify the work of your designer.
Once a copyrightable work is created, the owner of copyright has a bundle of separate rights in it. One of such rights is to modify or to allow others to modify the work. Make sure that you have obtained the right to keep using the website created by your designer if you were to make changes to it.
You should be able to take some elements of the design and use them as you see fit. You should be able to use these elements in your offline marketing materials (brochures, booklets, business cards). You should also be able to use elements of the design to apply for a trademark.
Otherwise, you may find yourself hostage to a difficult dilemma – either to continue using the services of your initial designer forever or to be forced to redesign the whole website and derivative materials from scratch.
If you think that it is a hypothetical scenario that never happens in real life, think again. See for yourself.
Another issue in this respect is whether you will be required to retain notices about the designer’s authorship of the design. There is no right and wrong answer here, but it is certainly an issue that you need to resolve with the designer before you agree to hire him or her.
So, let’s recap:
1. Always have your agreements with the designer in writing (in hardcopy or at least electronically);
2. Make sure the contract properly identifies the other party (is it an individual or a company? the party’s full name and address? if the other party is an individual, consider taking a copy of their ID);
3. Make sure you own the right to what you are paying for;
4. Make sure the designer undertakes not to create copies of your website for others;
5. Make sure the designer undertakes not to use third party materials (including images, scripts and fonts) unless you OK each such use;
6. Make sure the contract contains a provision that will allow you to recover your losses from the designer if you are sued by a third party whose materials the designer used without your approval;
7. If you are entering into a contract with a company, make sure the company indemnifies you if you are sued by the company’s own disgruntled employees or contractors;
8. Make sure you have the right to make modifications to the website without having to hire the same designer;
9. Make sure you have the right to use materials used in the website in your offline marketing materials without having to hire the same designer.
10. Make sure to settle the issue of whether you should identify the name of the designer on your website and marketing materials.
If a designer that you are planning to hire, or a web design company, or a design crowdsourcing website refuses to address these issues in a formal agreement, think twice whether it is a good idea to put yourself in the position when you would be paying for the privilege of being taken hostage by the designer’s whim.
A side note to designers, design companies and crowdsourcing websites: if you do not address these issues in your agreements with clients (or if you don’t even use written agreements with your clients), you are doing your clients a great disservice. In fact, offering your clients not only great design services but also legal peace of mind will be an important competitive differentiator for your business.
A thorough agreement drafted by an experienced copyright lawyer will cover all of these and many other issues. You see, the negotiation process tends to go much smoother before any work have been done and before the money has changed hands. Typically, the cost of helping parties resolve a dispute is much higher than the cost of preventing it by proactively answering all the “what ifs” and “how comes” in the text of a contract. That’s in addition to the indirect costs of the time wasted on unproductive activities rather than what brings you pleasure or generates money.
Today I am extremely excited to announce the arrival of a new service, IP Strategy Review.
Most business owners with great ideas that need to be protected try to control their legal bills by not going to see a lawyer until they need to be saved. Some try to proactively limit the scope of lawyers’ involvement by googling something and coming to see the lawyer with a very specific (and often unhelpful) request.
No business can make strategic decisions about protection of its most valuable assets, unless it understands what these assets are and how they can be protected. With IP Strategy Review, I provide to you, at a fully predictable flat rate, a customized strategic solution outlining which areas of IP can help protect your ideas and intellectual property and which legal steps can be taken to achieve that protection.
IP Strategy Review provides a true benefit at a predictable cost, without forcing the client to pay for unnecessary services. It is a consultation during which we will discuss your business and determine which strategies would make sense from the legal, business, PR and economic points of view.
This service develops upon my two policies: I never sell my clients unnecessary services and I always prefer to sell value to my clients, not my time.
It comes in three packages. Please visit the IP Strategy Review Page for more details.
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