Today I’m happy to accept your warm wishes for my firm’s first birthday.

This day is very important for me.

Unlike my personal birthday, the birth of Mincov Law Corporation was something over which I had complete control. This makes it even more special.

Like any one-year-old, I’ve absorbed so much information and I’ve learned so many new skills during this past year, I can hardly contain my excitement going into the second year.

Now that I’ve been running my own business for 366 days, after I made hundreds of connections and helped dozens of clients, I have a much better understanding of the role that legal advice plays in the life of a startup. You allowed me to better see the value that I can provide to my clients at different stages of their businesses.

Stay tuned for two electrifying announcements that I will be making today!

The Copyright Modernization Act adds a new subsection 27(2.1) to the Copyright Act.

The subsection simply states that, for greater clarity, the provisions of the Copyright Act dealing with secondary infringements do not apply to imported unauthorized copies of works and other subject-matter if such copies would have been excused under limitations or exceptions under the Copyright Act.

It is nothing new, since the existing Section 27(1) only applied to “a copy of a work, sound recording or fixation of a performer’s performance or of a communication signal that the person knows or should have known infringes copyright or would infringe copyright if it had been made in Canada by the person who made it.”

Secondary infringements, of course, include such acts as selling, renting out, distributing, offering for sale or rental, exhibiting in public, possessing for such purposes, and importing into Canada for such purposes.

The problem is that given the uncontrolled expansion of legalized infringements through fair dealing and otherwise, Canada may become a haven for unauthorized works that cannot be used anywhere outside Canada.

For example, many countries rightfully do not have an exception for parodies; most countries do not have broad exceptions with respect to educational use; most countries do not have exceptions with respect to non-commercial user-generated content. The new provision “clarifies” that not only unauthorized use of foreign works by Canadians would be excused if such use falls under one or another exception or limitation: it states that even copies that would be considered to infringe copyright in jurisdictions where such copies were made can still be lawfully used in Canada.

Again, this is nothing new, but the clarification makes it even more disturbing.

BOTTOM LINE: This is one of the few amendments that actually clarifies an existing provision of the Copyright Act. Still, this is very unfortunate that the new Section 27(2.1) makes it clearer that Canada finds it acceptable that it may become a market for laundering copies that are considered infringing in all other countries of the world.

The Copyright Modernization Act introduced some changes to Section 23 of the Copyright Act, the section about the terms of protection of neighbouring rights (the rights in respect of performances, sound recordings and broadcasts) in Canada.

I will compare my interpretations of the old and the new versions side by side. I will then provide some comments about the amendments.

My first general comment is that one arbitrary term is now replaced by a set of other arbitrary terms. Whether it’s 50, 99 or 500 years is largely immaterial. There really is no reason for it to be one way or the other. Just another compromise not based on any principles.

Secondly, the amended version has several references to a time “before the copyright expires”. Unfortunately, no clarification is given whether the reference is to copyright in the underlying work, the performance or the sound recording. If I were to venture a guess, I would say that the references in the new s. 23(1) are to the copyright in the performance while the reference in the new s. 23(1.1) is to the copyright in the sound recording. I see no other interpretation that would be logically consistent. Clarity, however, is not one of the strong points of these amendments.

The biggest problem that I have with amendments to Section 23 is the wording relating to the term of protection of performances.

Let me take you back to the definition of a performer’s performance:

”performer’s performance” means any of the following when done by a performer:

(a) a performance of an artistic work, dramatic work or musical work, whether or not the work was previously fixed in any material form, and whether or not the work’s term of copyright protection under this Act has expired,

(b) a recitation or reading of a literary work, whether or not the work’s term of copyright protection under this Act has expired, or

(c) an improvisation of a dramatic work, musical work or literary work, whether or not the improvised work is based on a pre-existing work;

Nothing in this definition suggests that a reference is to the first performance by a performer. I see no reason to read this definition as anything other than EACH performance of a performer.

Now, the next great question is – how do you fixate a performance that happened in the past?

Let’s go back to the amendments to Section 23(1). This time, I quote:

Subject to this Act, copyright in a performer’s performance subsists until the end of 50 years after the end of the calendar year in which the performance occurs. However,

(a) if the performance is fixed in a sound recording before the copyright expires, the copyright continues until the end of 50 years after the end of the calendar year in which the first fixation of the performance in a sound recording occurs; …

If the words “before the copyright expires” refer to the copyright in the performer’s performance, then the only way to read s. 23(1)(a) is as follows: “If the performance is fixed in a sound recording not later than 50 years after the end of the calendar year in which the performance occurs…”

So we have a performer perform an artistic work, a dramatic work, or a musical work, recite or read a literary work, or improvise a dramatic work, a musical work or a literary work, which performance is not fixed at the time when it occurs, but then somehow miraculously it becomes fixed in a sound recording some time in the future.

This makes absolutely no sense if each performance is protected separately from all previous and future performances by the same performer. However, as I mentioned before, nothing seems to suggest that only the first performance receives protection, while all others remain unprotected. Unlike sound recordings that may be reproduced, live performances are never identical.

Section 23(1)(b) makes things even worse by further modifying the term of protection of performances:

“if a sound recording in which the performance is fixed is published before the copyright expires, the copyright continues until the earlier of the end of 50 years after the end of the calendar year in which the first publication of the sound recording occurs and the end of 99 years after the end of the calendar year in which the performance occurs.”

So we have a performer perform a performance, which is fixed at some point, but the sound recording is not published until some time later – so far so good – so the term of protection is then linked to the year of the publication, not the year of the fixation. This is understandable. However, what follows makes no sense. Again, under which scenario would the publication of the sound recording occur before the expiration of the copyright in the performance, but the 50th anniversary of such publication would occur more than 99 years after the performance?

Let’s use an extreme example.

We have a sound recording of a performance that took place in 1963, which recording remained unpublished until 2012. It gets published in 2012 (i.e. within the 50 term of copyright for performances), and according to s. 23(1)(b) would be protected for 50 years following the publication. Thus, the protection would be extended up to the end of 2062, which also happens to be 99 years after the performance. There may be an extra year missing in my calculations because the calculations should actually take into account the remainder of the triggering year, but I cannot imagine that the purpose of the reference to 99 years was to cut off one year from the term of protection. And we just used the most extreme example when the publication happens just before the expiration of the initial term of protection for the performance.

One of the rules of legal interpretation is that our laws do not contain unnecessary language. But here are my two questions to the drafters of this masterpiece:

1. In which circumstances would a performance be fixed in a sound recording after the copyright expires?

2. In which circumstances would the 50th anniversary of the first publication of a sound recording fixating a performance that took place no more than 50 years before such publication occur more than 99 years after the performance took place?

BOTTOM LINE: Yes another piece of incomprehensible language that only muddies the water. If the goal was to extend protection for performances embodied in sound recordings published after the first fixation, that goal could have been accomplished in a much clearer way.

And so, round one of Apple v. Samsung court saga is over.

A jury of nine Americans have unanimously handed Apple a victory in the form of a verdict for $1,049,343,540.00 in damages. Imagine a cheque for this amount: “One Billion Forty Nine Million Three Hundred Forty Three Thousand Five Hundred Forty Dollars and 00 Cents.”

Kyle Vanhemert has a great day-by-day rendition of the trial.

Wall Street Journal has an equally great chart showing the mutual patent and design patent claims of Apple and Samsung, and the jury’s decision as to each of these claims with respect to each of the allegedly infringing phone models.

Apple spokeswoman Katie Cotton in a statement to the New York Times said:

“We are grateful to the jury for their service and for investing the time to listen to our story and we were thrilled to be able to finally tell it. The mountain of evidence presented during the trail showed that Samsung’s copying went far deeper than even we knew. The lawsuits between Apple and Samsung were about much more than patents or money. They were about values. At Apple, we value originality and innovation and pour our lives into making the best products on earth. We make these products to delight our customers, not for our competitors to flagrantly copy. We applaud the court for finding Samsung’s behavior willful and for sending a loud and clear message that stealing isn’t right.”

Samsung Electronics issued the following statement:

“Today’s verdict should not be viewed as a win for Apple, but as a loss for the American consumer. It will lead to fewer choices, less innovation, and potentially higher prices. It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies. Consumers have the right to choices, and they know what they are buying when they purchase Samsung products. This is not the final word in this case or in battles being waged in courts and tribunals around the world, some of which have already rejected many of Apple’s claims. Samsung will continue to innovate and offer choices for the consumer.”

Google, the force behind Android OS, released the following statement:

“The court of appeals will review both infringement and the validity of the patent claims. Most of these don’t relate to the core Android operating system, and several are being re-examined by the US Patent Office. The mobile industry is moving fast and all players – including newcomers – are building upon ideas that have been around for decades. We work with our partners to give consumers innovative and affordable products, and we don’t want anything to limit that.”

A great comment came from Al Sabawi, a former IBM executive, who wrote:

“To all the lazy copycats out there who think cutting and pasting is an intellectual achievement, that hard work, sweat and tears don’t matter, that ideas, designs, and innovations can be stolen willy-nilly with no consequences: This is to you.”

It comes as no surprise that Samsung will now appeal the decision, and this is the decision of the appelate courts that would be of extreme interest to everybody – IP lawyers, innovators, copy-cats and consumers alike.

For now, I would like to share a couple of observations and comments about this case.

First of all, despite all today’s attacks against intellectual property and the forced “let’s all share” mentality, we have a unanimous decision of 9 non-lawyers who confirmed that patents as tools for protecting innovation are still worth something. In this case, they were worth a Billion bucks. In my opinion, Apple’s statement was very on point. The verdict is about values, it is about sending the message, as clearly as it gets, that taking something that’s not yours is improper.

Second, I’m baffled (although, not really) to read a great number of comments to the effect that Apple’s patents and the jury’s verdict will kill competition and rip off consumers of legitimate options. By definition, patents are about building a monopoly based on something you managed to invent, which had not existed before. Granted, there are tons of nonsense patents out there and a great number of patent trolls, we all know that. The real issue is that legitimate patents always create a monopoly, and there is absolutely nothing wrong with that monopoly.

Just because iPhones had tremendous success does not mean that the monopoly should be destroyed. This goes back to my argument on copyright laws when I reject that public interest should have a role in copyright protection: we don’t have copyright laws to protect works that no one wants to use, while creating loopholes for unauthorized use of works that are popular with the public. If no one wants to use a work, there is no need to have laws to protect it.

I remember the day when the first iPhone was released and all the usual Apple fans vs. Anti-Apple fan battles raging with renewed force. Essentially, after that day the world was divided into three groups: those who owned or dreamed of owning an iPhone; those who had no money or desire to buy an iPhone but wanted their phone to have an interface resembling the one of an iPhone as closely as possible; and those who for one reason or another disliked anything that Apple might put out on the market, didn’t want their phones to be like an iPhone but wanted them to have similar functionality.

The iPhone became and still is the measure of comparison for all cell phones on the market.

Apple knew the value of the innovation that it brought to the market with the release of the iPhone, and so it spent a lot of money in an attempt to protect this innovation. Its efforts have paid off – first with the massive acceptance by the market, and now when the jury confirmed the validity of its patents.

Is this a loss for consumers? Even if so, it is a loss of illegitimate advantage. To avoid an analogy with theft of tangible goods, imagine a situation when somebody came up with a way to trick PayPal into adding $10 a day to everyone’s balance. If at some point PayPal decided to fix the problem, would that be a loss to those who would stop receiving the undeserved benefits? Of course!

Samsung is a serious competitor with a pile of patents of its own. They certainly know how to innovate. Otherwise, it would be difficult for Samsung to win a record almost 20% market share for all LCD TVs sold worldwide. Don’t tell me they can’t come up with technologies that wouldn’t infringe on other company’s patents. At least, don’t tell me they can’t properly license such technologies from those who invented them first.

This is what competition in the XXI century is all about. It’s not about who can manufacture the best and cheapest version of a gadget, it’s about who can come up with a gadget that will redefine the way people live their lives.

Love it or hate it, but this is exactly what Apple did when it released the iPhone and the iPad.

And Apple didn’t precisely intend to prevent Samsung from selling competing phones. Apple actually offered Samsung to license its patents at $30 per smartphone and $40 per tablet.

Finally, and I’ve commented on this issue already, in my opinion, the litigation between the giants (especially, after it will have gone through all available appeals) gives us all a great benefit of having a better understanding of the limits of the modern patent system. Very few patent owners can afford to go out and start a full-blown patent litigation war. So we have been left with a plurality of lawyers’ opinions as to what should be considered obvious, what should be considered novel, and what is the proper subject-matter for a tech patent.

We will soon find out.

PS. Full disclosure: I don’t have an iPhone because it’s too heavy and too big for my taste. However, I’m slowly getting fed up with my current phone and will be investigating my options soon.

Would I, as a consumer, benefit from someone making a 3” version of an iPhone? Absolutely! Do I have a right to expect Apple to allow others to manufacture versions of Apple’s patented products simply because Apple does not see a big enough market for 3” iPhones? Absolutely not!

Section 22 of the new Copyright Act only has some cosmetic changes.

The Minister will have the right to grant reciprocal protection not only to countries other than the Rome Convention countries, but also to countries other than WPPT countries.

The only issue I see with this change is that the conjunction “OR” is used. Sections 22(1) and 22(2) now use the following construction to refer to countries to which reciprocal provisions may apply:

”…country other than a Rome Convention country OR a WPPT country”

Logically, a WPPT country falls within the definition of a "country other than a Rome Convention country or a WPPT country". Likewise, a Rome Convention country falls within the definition of a "country other than a Rome Convention country or a WPPT country".

In fairness, I don’t see any particular risks associated with this lack of precision, but it is still unfortunate.

BOTTOM LINE: Changes are merely cosmetic, even though the make up could have been better.