A Patent Prosecution Highway ("PPH") program was implemented between the Canadian and US patent offices in 2008 to accelerate patent examination and issuance. Under the PPH, an applicant with allowable claims in either a US or Canadian patent application may request that the other country's patent office provide a fast track examination to the corresponding application. The sharing of search and examination results between offices is intended to expedite and improve the quality of examination.

As an example of how the PPH works, if a US patent application is examined and claims are approved as patentable ("allowable") by the US Patent Office ("USPTO") the patent applicant can then use the PPH to request accelerated examination of the corresponding patent application in the Canadian Patent Office ("CPO"). US examination reports generated by the USPTO are submitted to the CPO examiner for review. The patent applicant must also align the unexamined Canadian patent application claims to be very similar or identical to the allowable US claims. The similarity requirement for the PPH claims facilitates the Canadian examiner's review of the US search results and examination reports. The time to patent issuance in Canada can be reduced from years to months in some cases. As well, it is hoped that the patenting process becomes cheaper in Canada, provided that the Canadian examiner views patentability the same as the US examiner and does not make a lot of significant new objections. In circumstances where allowable Canadian claims are obtained before the US patent application is examined, then expedited PPH examination may be requested in the US. Certain other qualifications must also be met, which are not discussed in detail here.

The traffic flow trends at the USPTO and CPO have been consistent since the start of the PPH pilot program: PPH traffic flows heavily into the CPO and slowly into the USPTO. To date, the CPO has received 898 requests to expedite examination under the PPH. In sharp contrast, the USPTO has received 29 PPH requests under the PPH program (as of the end of March 2010). This difference is not unexpected since US patents are often examined and granted before examination is initiated in Canada. This is in part due to the Canadian patent system allowing applicants to delay examination for up to 5 years from the application filing date. The uneven traffic is also partly due to PPH requirements that Canadian patent applications cannot proceed via the US PPH system if they are based on a patent application that was first-filed in the US (many Canadian patent owners file in the US first because it is a major market). We think this restriction on PPH access should be removed.

The Canada-US PPH is currently running as a pilot program until 2011. The program was already extended once and we see no reason why it would not be extended again. In Fall 2009, Canada established similar PPH pilot programs with Japan, Korea and Denmark, which indicates that the Canadian government believes that the PPH concept is beneficial and should be expanded. The Canadian PPH pilot programs with Japan, Denmark and Korea will run until at least September 30, 2011. To date, the CPO has received 3 requests to expedite examination based on Japanese patent applications. No requests have been received yet in respect of Danish or Korean applications.

The PPH provides a useful tool in the patent applicant's toolkit. It is not appropriate or applicable for all Canadian patent applications; however, it should be kept in mind at the outset of planning a patent strategy.

When should software and business methods be patentable, if ever? Two courts are currently grappling with this very question. In the United States, the Supreme Court is expected to deliver its decision in Bilski v. Kappos within weeks. In Canada, the Federal Court recently heard oral arguments in Amazon.com, Inc. v. The Attorney General of Canada et al, the Amazon 1-Click appeal. Both cases are likely to shape the patent landscape for years to come.

Previous developments

Previous decisions in Bilski and Amazon both conspicuously broke with established patentability requirements and led to the current appeals. Each discarded earlier subject matter tests that looked primarily to the result of a method to determine whether the method was patentable. The mere presence of economically useful activity is no longer sufficient. Rather, the means used to accomplish the method are now a relevant consideration.

In the U.S., the means must be a "machine" or "apparatus" under the newly-developed machine-or-transformation test. Jurisprudence there has established that a general purpose computer, when programmed to perform a particular task, is indeed considered a "particular" machine. This semantic trick belies a deep insight into the nature of modern industry.

Fewer and fewer modern machines can be found today without at least some software in them. This is no surprise, as building in flexibility through software is incredibly useful. For example, modifications to a machine might have previously required custom machining of parts, or redesign of a circuit board. Today, many of the same changes can be made quickly and easily with modification to software code. Rather than recall thousands of defective devices, manufacturers can effect repairs with a simple patch.

Thus, the trick that allows a computer to be considered a particular machine recognizes that software is, in many cases, a direct and superior replacement for the physical machines that used to power industry. As such, it should be entitled to the same protections.

However, there are complaints that a strict machine-or-transformation test is too rigid. Others argue that no software should be patentable at all. It is difficult to craft a definition of patentable subject matter that accommodates the many useful applications of software while prohibiting mere abstract ideas or concepts.

The Amazon decision in Canada attempts to address this difficulty by adopting a more ambiguous "technological solution to a problem" definition, while also renewing the "change of character or condition of a physical object" test from the well-known Lawson case.

Reading the tea leaves

Based on transcripts of oral arguments, the U.S. Supreme Court appears genuinely determined to identify a middle ground between rigid application of a machine-or-transformation test and the previous "anything under the sun" approach. For instance, Justice Sotomayor asked how the Court could limit patentable subject matter to "something that is reasonable" if not to "technology" specifically. Several of the justices were critical of the Federal Circuit's machine-or-transformation test and it is likely that it will be reformulated, if not replaced outright.

If the Court does adopt the middle ground, software patents should emerge safely and perhaps with a better-defined test for patentability.

In Amazon, argument appears focused on a definition for "art" (method). Amazon prefers the much more expansive definition cited in the Supreme Court's Shell Oil decision: "new and innovative methods of applying skill or knowledge provided they produced effects or results commercially useful to the public."

For its part, the Crown argues that the Shell Oil definition was limited only to a sub-class of patent methods. Therefore, the Lawson "change of character or condition" formulation ought to apply in other cases.

The next few months will tell if the Federal Court adopts an approach similar to that predicted in the U.S.

In Canada, under s. 48(1) of the Patent Act, a patentee can disclaim portions of an issued patent if "by mistake, accident or inadvertence, and without any willful intent to defraud or mislead the public," the patentee has "made a specification too broad, claiming more than that of which the patentee… was the inventor." Disclaimers can be filed to correct errors in patents and can be used to enhance the validity of existing claims by narrowing the claims based on newly discovered prior art. However, patentees should proceed with caution, as disclaimers filed in the wrong manner, or for improper purposes, can be fatal admissions against self-interest.

Recently, a Canadian court — Hershkovitz et al. v. Tyco Safety Products Canada Ltd. 2009 FC 256 — has held a disclaimer can be refused if not filed in the prescribed form and manner. The court noted that the patentee should follow the prescribed wording and must not use the disclaimer to redefine or broaden the invention claimed (the re-examination process is available for more substantive changes).

The Court also held (para. 78), despite the absence of a statutory deadline for filing a disclaimer, that a patentee has a duty to "act in good faith" to file a disclaimer "promptly and diligently when he or she becomes aware of a mistake, accident or inadvertence." A patentee should file a disclaimer as soon as the deficiency in the patent as identified and should not wait to file a disclaimer as a litigation tactic. Further, the onus of showing that there was "mistake, accident or inadvertence" falls on the patentee attempting to file the disclaimer. The patentee must be able to show (para. 79) that the disclaimer was filed "in good faith and not for an improper purpose."

If a disclaimer is refused, the patent at issue returns to the claims as they existed prior to filing the disclaimer, but the admissions made in the disclaimer regarding errors in the scope of the claims (i.e. that the issued claims were too broad in scope) will be worn by the patent (para. 94) "like a scarlet letter." Such admissions against the patentee's interest can be considered by the Court and can serve as the sole basis for finding of invalidity. Perhaps s48(1) should include its own disclaimer: "Use at Own Risk."

  and by Jill Jarvis-TonusJill Jarvis-Tonus, B.F.A. (Dramatic Arts), LL.B., leads the New Media/Copyright Practice group for Bereskin & Parr LLP. In recent years, Jill has increasingly worked on copyright and trade mark matters relating to new media products and Internet services, including the drafting of website agreements and other Internet related contracts, the selection and protection of domain names, advising on the infringement of copyrights and trade marks on the internet and privacy law concerns.
[click on the author's name to go to email and web page links]

Twitter has become a cultural phenomenon, 140 characters at a time. More than 105.8 million Twitter users creatinge 55 million “tweets” per day. Billions of tweets, since Twitter’s birth in 2006.

On April 14, 201009 two tweets announced that the Twitter phenomenon would become both indelible and searchable.

The U.S. Library of Congress (@librarycongress) tweeted that it “will acquire the ENTIRE Twitter archive — ALL public tweets, ever, since March 2006!” Google (@google) tweeted that you can “now use Google to search across the public archive of tweets and "replay" moments in time.” A small percentage of protected tweets, that are not publicprivate, will not be archived or searchable.

Twitter donated access to its archive of public tweets to the Library of Congress for preservation and research. After a six-month delay, the tweets can be used for the L library’s internal use, non-commercial research, public display by the Llibrary itself, and preservation.

Google has also created a way to revisit public tweets related to historic events. Google Replay allows you to search for keywords, and see what was tweeted at specific moments in time. Right now it is in Google’s Experimental Labs, and only goes back a few months, but eventually Google Replay plans to cover all public Tweets.

Aside from whatever historic or cultural value of the entire Twitter archive may have, it’s interesting to consider whether these initiatives meet Twitter users’ expectations.

Twitter is public, and for that reason alone, it may be obvious that user’s tweets are and may always remain public. On the other hand, some may tweet believing that the “public” is practically limited to their “followers” (perhaps reinforced by the ability to “block” unwanted followers). Twitter’s Terms of Service now make it clear that Twitter is public – the “You are what you Tweet” philosophy. However, the initial Terms of Service were not so express and Twitter’s popularity took off recently, andearly adopters may have not have had suchlikely believed that their audience wasn't global or that their messages weren’t everlasting. Remember the rise of the Facebook nation when that social media site tried to unilaterally change its Terms of Use to allow for permanent retention of users’ content.

In terms of rights, Twitter users retain rights in their tweets, and grant Twitter a “worldwide, non-exclusive, royalty-free license (with a right to sublicense) to use, copy, reproduce, process, adapt, modify, publish, transmit, display and distribute such content in any and all media or distribution methods (now known or later developed).” The rights could be strung together to cover “archiving,” and Twitter could be sublicensing these rights. For example, a right to use, reproduce, process, transmit, display and distribute could arguably be sublicensed as the basis to permit archiving.

Notably, though, an “archiving” right isn’t specifically enumerated. Even more notably, the license is neither irrevocable, nor perpetual. So what if a Twitter user tried to revoke the license (for example, wanting to maintain the market for a compilation of their most profound tweets). This leads to a whole other set of questions. 

• Do Twitter users have copyrights in their 140-character Tweetstweets?
• Are they original works, protected by copyright? 
• Would they be considered spontaneous utterances, subject matter that copyright has been reluctant to protect? 
•  Are all of the tweets of one user, a compilation? If so, who owns it?
• Would Twitter or the Twitter user have created the selection and arrangement of the compilation? 
• Does a grant of rights amount to an admission? 

Twitter’s initial Terms of Service referred to “copyright,”, the new terms just refer to “rights,”, although the grant is typical for copyright. All in all, would Twitter be required to comply and take down tweets if the license is revoked? If so, is there a domino effect on the Library of Congress and Google? If not, is Twitter sublicensing rights it itself lacks? Though the content of many tweets may not be complex, the potential copyright issues arising from these initiatives could be.

From a privacy perspective, it’s not obvious that there is a reasonable expectation of privacy in public tweets. Twitter’s Privacy Policy says that its services are primarily designed to help its users share information with the world, and that users are asking for most of the information provided to Twitter to be made public. That said, if Twitter provides its archive to third parties, such as the Library of Congress, that may amount to “disclosure” of personal information not covered by Twitter’s privacy policy. Users' complaints to Privacy Commissioners could arise.

For those of you who fear your tweets being searchable and archived for all to see, if you “protect your tweets,”, only those you approve will receive your them, and they will not appear on the public timeline. 

Tweets posted previously may still be publicly visible “in some places” (whether these “places” will include the Library of Congress or Google remains to be seen).

The decision in Vinod Chopra Films Private Limited et al. v. John Doe 2010 FC 387 by Hughes, J. concerns a review of a "rolling" Anton Piller order granted by the Federal Court of Canada in a copyright infringement case to an Indian film production company and its Canadian licensee against various un-named persons who (according to the claim) "deal in counterfeit video recordings."

Pursuant to Justice Zinn’s Order of January 26, 2010, the plaintiffs seized allegedly counterfeit copies of a film entitled "3 Idiots" from a number of defendants who then sought review of the Order.

An Anton Piller order is an extraordinary equitable remedy that permits the representatives of a plaintiff to request entrance into a defendant’s premises to search for and seize relevant documents and other materials that the defendant is likely to destroy. If the defendant refuses to allow entry, he or she may be held in contempt. Because these orders are almost always sought without notice to the defendant, a plaintiff is required to make "full and frank disclosure" to the court, including the weaknesses in the plaintiff’s case. The order will generally stipulate that the parties are to return to the Court after execution of the order so that the defendant may challenge the basis on which the order was granted or the manner in which it was executed. Anton Piller orders granted against unidentified (or "John Doe") defendants are often referred to as "rolling" Anton Piller orders.

In Vinod Chopra, Justice Hughes set aside the order of Justice Zinn on April 12, 2010 and awarded full indemnity costs to the defendants, stating that the evidence that the plaintiffs had relied upon in seeking the order was "insufficient, careless and misleading." His reasons (summarized below) are the latest authority on how and, more particularly, how not to obtain an Anton Piller order in the Federal Court. Justice Hughes also dismissed the copyright infringement action against the affected defendants because he found that the plaintiffs knew the defendants' identity when they commenced the action against "John Doe." The "John Doe" name was therefore not merely a "misnomer" that could later be fixed by a simple amendment to the style of cause.

Justice Hughes stated the following in his reasons:

• The criteria for obtaining an Anton Piller order are the traditional four requirements that:
  • the plaintiff has a strong prima facie case on the merits;
  • the potential or actual damage to the plaintiff relating to the defendant’s activities is “very serious”;
  • the defendant likely has in its possession incriminating evidence;
  • there is a real possibility that the defendant may destroy such evidence before the discovery process

  plus the two more recent requirements described in Netbored Inc. v. Avery Holdings Inc. 2005 FC 1405 that:

  • the execution of the order would not harm the defendant or its case; and
  • the interests of justice would not be brought into disrepute.
• Each of those points must be clearly established by the plaintiff’s evidence in the request for the order. There must be sufficient proof to support an allegation that relevant evidence will likely be destroyed, not a mere allegation to be supported later by evidence of the defendant’s conduct after the order was granted. The affidavit evidence must be specific, must be based on the personal knowledge of the affiant as much as possible and should specify that the actual or potential damage to the plaintiff is “very serious”. In Vinod Chopra, Justice Hughes found it “highly improper” for the plaintiff’s representative to swear an affidavit on the nature of the defendants’ activities that simply reported information he received from his lawyer.
• Where the evidence obtained during the execution of the order fails to disclose “very serious” harm to the plaintiff, a negative inference will be drawn as to whether there was foundation for the order. For instance, in Vinod Chopra, Justice Hughes drew a negative inference from the fact that only a handful of admittedly counterfeit videos were seized during the execution of the order.
• Where the defendants had notice of the plaintiff’s complaints before the order was executed, the Court, on review of the order, will look to whether the defendant took steps to hide or destroy relevant evidence after receiving notice. A negative inference will be drawn in the absence of such evidence.
• The naming of "John Doe" as a defendant in an action is permissible only if the defendant’s true identity is unknown and not easily ascertainable. It cannot be used an attempt to introduce a new party by way of addition or substitution.
• An Anton Piller order obtained for the primary purpose of allowing the plaintiff and its agents to harass persons suspected of infringing the plaintiff’s rights will bring the interests of justice into disrepute.

I'm pleased to be able to tell you that this coming week we have a firm guest blogger joining us. Bereskin & Parr is a leading Canadian IP firm with offices in Toronto, Montréal, Mississauga, and the Waterloo Region. They've provided us with the following description:

Founded in 1965, Bereskin & Parr LLP serves clients in over 100 countries worldwide. With more than 260 people, including more than 70 lawyers, patent and trade mark agents, Bereskin & Parr and its award-winning professionals are consistently rated in Canada as the benchmark for intellectual property law.

The firm has dedicated practice groups serving industries such as Biotechnology & Pharmaceutical, Software/High Technology, Mechanical/Industrial, Chemical, Automotive and Entertainment & New Media. The firm’s hallmarks of delivering the highest levels of excellence, integrity and professionalism provide clients with customized solutions for the use, licensing, protection and enforcement of patents, trade marks, copyright, industrial designs, trade secrets, and issues including transactions, portfolio management, packaging requirements, and promotional and advertising claims. With depth of experience and diverse technical backgrounds, Bereskin & Parr offers focused, timely advice and practical, cost-effective results. In October 2009, the firm launched a Clean Tech Practice in response to the unprecedented levels of innovation in a wide range of alternative products and services, including energy, green building, infrastructure, environmental and other clean technologies.

As always, you'll know a post is from our firm guest blogger because this banner will be prominently displayed at the top of the entry:

I know that our guests would be happy if you took the time to comment on their posts, whether with a concurring or dissenting view.

♫ I've got a wealth of new ideas
I've got so many new ideas
I've got so many new ideas
I've got so many new ideas
(Show me, show me, show me all your new ideas)…♫

Lyrics, music and recorded by The Dykeenies.

In Nicole Garton-Jones' post on "A Different Way to Look at Law Firm Strategy" we delved into the issue of trying to promote innovation within a law firm.

I was pleasantly surprised to receive the Ohio State University Leadership Center's latest Leadership Newsletter by Beth Flynn, M.S. on this very issue. I sought and received her permission to reprint it here:

Embrace New Ideas:

· Create an idea-friendly environment. Make your business a place where new ideas are valuable.

· Protect idea people. They are often free thinkers who may occasionally drive you nuts, but are worth their weight in gold to an organization that must thrive on new ideas.

· Champion new ideas. New ideas need protectors and champions. Ideas need a shepherd to guide them through the difficult processes that are most often set for the sole intent of killing anything new.

· Win over enemies with new ideas. You are going up against formidable opponents, and you must be prepared or you will be eaten alive. Get them thinking of ideas and involved in the experience. Give them the responsibility of finding a way around an obstacle (that they themselves have pointed out) when they resist a new idea (Heath, p. 27-28).

From: Heath, R. (2009). Celebrating failure: the power of taking risks, making mistakes and thinking big. Franklin Lakes, NJ: Career Press.

Celebrating Failure is available on loan from the Ohio State University Leadership Center. To borrow this resource or any other resource, please go to the resource search page http://164.107.48.88/winnebago/index.asp?lib=???

To subscribe to the Leadership Moments list — send e-mail to: flynn.61@osu.edu.

Keep up the good work Beth – you have so many new ideas on leadership!

[QUIZZIN 1]

Of the many challenges facing trial judges, one of the greatest is conducting proceedings with a self-represented accused. Invariably the self-represented accused comes to court with only a rudimentary knowledge of the trial process, often influenced by misleading depictions from television shows and the movies. He or she is unfamiliar with the substantive law, is confused by procedural requirements, and has difficulty grasping concepts such as relevance.

The burgeoning number of self-represented accused in the criminal courts may be explained by cut-backs to legal aid funding across the country, the cost of legal services, mental health problems that make it difficult for some accused to accept assistance form any lawyer, and even the sincere belief, fostered by movies and television shows, that anyone can perform as Perry Mason given the chance.

Increasingly, however, trial judges are faced with a new breed of self-represented accused. He or she is argumentative, rude, and disrespectful of authority. He or she seizes every available opportunity to remind the trial judge about fair trial rights, yet engages in tactics that serve no purpose other than to delay and obstruct the proceedings. He or she comes to court with an annotated Criminal Code and a stack of highlighted cases, but makes no effort to comply with the rules of procedure, even once informed about them by the presiding judge. Attempts by the trial judge to move the proceedings along in an orderly fashion are met by the refrain “But I’m an unrepresented accused who is without counsel”. Section 7 of the Charter is mentioned early, and often.

This is the self-represented accused who purposely foregoes counsel in order to cause as much disruption as possible to the trial, in the hope of derailing the proceedings. If unsuccessful in that attempt, this sort of self-represented accused has no hesitation about arguing on appeal that the trial judge, whose every direction he ignored, failed to give him or her the appropriate assistance.

This new generation of self-represented accused poses the most difficulty for trial judges, and the greatest challenge to an administration of justice that is already tested by demands that self-represented litigants place on the system.

Numerous examples of efforts to delay and disrupt the trial are noted in reported cases. The behaviour includes asking irrelevant questions of witnesses, and then arguing with the judge after rulings that specific questions could not be put; deliberately pausing for several minutes between questions of witnesses; asking witnesses to testify to hearsay even after the trial judge explained the objectionable nature of such evidence; asking individual witnesses the same question four or five times over; calling dozens of marginal defence witnesses so as to delay taking the witness box; repeatedly complaining to the jury that the trial judge would not compel the attendance of a particular witness; making long statements to the jury about irrelevant matters; and using profane and inflammatory language.

Appellate courts have sometimes supported the attempts of trial judges to control the difficult self-represented accused, as did the Quebec Court of Appeal in the notorious case of Fabrikant. But in other instances, trial judges have not fared well on appeal.

It is not surprising that trial judges have a sense of uncertainty about how far they can legitimately go in attempting to control the difficult self-represented accused. No trial judge aspires to be unfair, regardless of his or her level of frustration with an accused’s conduct. Few trial judges relish reversal by the Court of Appeal on the ground that they improperly shut down a self-represented accused’s cross-examination or closing address. They are understandably uneasy about taking this step, even in egregious cases. Resort to the contempt power has little impact where the accused is already in pre-trial custody and is facing the potential of a long jail sentence at the end of the trial. Excluding the accused from the courtroom is viewed as an option reserved for the most egregious cases.

Is it time to rethink the broad proposition that counsel can never be imposed on an accused who wishes to represent him or herself? The decision to self-represent has been described as a principle of fundamental justice, and even as a right. Any interference with it cannot be undertaken lightly. But section 486.3 of the Criminal Code already provides a limited exception to an accused’s ability to self-represent. That section empowers a judge to make an order appointing counsel for the purpose of cross-examining one or more witnesses, even over the objection of the accused. Should this power to appoint counsel be extended to the conduct of a trial as a whole, in circumstances where the presiding judge is satisfied that the proper administration of justice requires that the accused not act for him or herself, because, for example, he or she has shown an unwillingness to follow judicial direction?

What if the various courts used their rule-making power to explicitly state what some appellate courts have suggested, that abuse of the opportunity to ask questions of witnesses, call witnesses, or make submissions can result in the loss of that opportunity, or at least its curtailment, for example, by the imposition of time limits on questioning of witnesses or making of submissions?

Is s. 650(2) of the Criminal Code worded too narrowly? That section permits a judge to order an accused removed from the courtroom where he misconducts himself by interrupting the proceedings so that to continue in his presence would not be feasible. Arguably, this provision does not extend to the accused who persists in asking repetitive, irrelevant or improper questions, or who deliberately tries to delay or slow down the proceedings, or who repeatedly fails to abide by judicial direction. Should the provision be amended to apply not only where the accused interrupts the proceedings, but also where the accused impedes the orderly conduct of the proceedings, for example by failing to follow the instruction of the presiding judge?

If complete exclusion from the courtroom is thought too harsh a response to misconduct, should judges at least have the explicit power to require the hard to manage self-represented accused to participate in the proceedings by video link from somewhere in the courthouse other than the courtroom?

Lastly, should s. 475 of the Criminal Code, which deals with an accused who absconds during his trial, be amended to explicitly permit the judge to deem the accused to have absconded in certain circumstances? Such circumstances might include where the accused refuses to leave the jail or come out of the courthouse cells, or where he or she feigns illness or injury in an attempt to delay the proceedings when a request for adjournment is refused–all scenarios that trial judges have faced.

The trial judge has a duty to assist the self-represented accused in the proper conduct of the defence, and to guide him or her throughout the trial. But this should not mean that the judge must endure manipulative or obstructive behaviour on the part of that accused. Unless and until trial judges have the necessary tools to control the obstructionist self-represented accused, the objective of a fair trial on the merits remains at risk.

Many lawyers assume that the Court process is unable or unwilling to take advantage of available electronic technology. Sometimes they are correct.

The problem is often one of communication. In many Ontario centres the lawyers are unaware until the last moment of who will be presiding over their case; and most often judges are unaware of the cases they will be asigned until the day before the hearing or trial. Many judges (myself included) will ask during a pre-trial or management session just what preparation has been made by the parties to reduce the use of paper. Too often that is the first time the issue has been raised or thought about by counsel, often because the lawyers do no think the Court will be receptive.

The bar should initiate with Court administration just what they would like to do with technology in their particular case, and most often steps will be taken to accommodate where possible. We still have both some judge and some lawyers who are unwilling to adapt, however the numbers of both are slowly diminishing. The message for both willing lawyers and judges is: if you don't ask in time you may not be efficiently able to use technology. So ask. We all have to keep trying.

At issue in the GasTOPS trial was the development and sale of a software program for the computerized maintain of jet engines and aircraft. The benefits of a Computerized Maintenance Management System are that it reduces maintenance mistakes while at the same time reducing labour costs.

When I fly on an airplane or ride on a train I am encouraged to buy my ticket online. I recently was at my family doctors office and instead of a thick file of handwritten notes covering 35 years of attendances, test results and prescriptions, she brought up my file on a monitor in her office. She is a member of a small clinic which has found it advantageous to go paperless by scanning all reports received into the file. She now types her notes into the file which can be searched at a later date. Also the computer prints out the prescription and for the first time in my life I can read what drug I am being prescribed and feel confident that the pharmacist is not guessing at what an illegible scrawl really means.

My dentist has a similar system wherein all information concerning my remaining teeth including ex-rays are stored in a software program. He has the ability to access such information from this office, examining room or from home. His computer programs bills my dental insurance company online and within two days an electronic deposit is made into my bank account and I receive an e-mail advising me of the deposit.

Today my furnace and electronic air exchanger received their annual inspection and when the technician gave them a clean bill of health he produced a handheld computer device and imputed what he had done. The handheld device then printed bill of what he had done and to my horror how much of my money he had spent.

Yesterday FedEx arrived at our door with a parcel and the driver produced a handheld device for me to sign to acknowledge receipt of the package.

We live and function in an electronic world. We bank on-line; we purchase goods and services on-line and pay for them electronically. All of the recent reports indicate that electronic books are making great inroads into the book market. When I travel to Mexico for an extended period of time I purchase a number of electronic bestseller at about half the price of hardcopy books, put them on my Sony Reader and go off to Mexico with a library of over 45 full length novels. If I was prepared to risk the wrath of “she who must be obeyed” I could put pdf. legal files on my Reader for review in Mexico.

Businesses, banks, government services, doctors, hospitals, dentists etc. are converting to an electronic environment as it is more efficient and less expensive.

It would seem to me that law offices whether big or small, rural or urban could reduce their expenses and thereby reduce the fees they charge their clients by going paperless and using an electronic litigation support program. In an electronic environment:

• Electronic documents whether in native digital format or scanned into an electronic document are filed in litigation support program where each is identified by date, author, issue, person who can prove and any other identification;
• Documents can be electronically sorted for disclosure, discovery and trial;
• Documents can be accessed anywhere counsel’s laptop can connect to the firm network;

As well, an electronic environment can lead to:

• Reduced photocopying charges;
• Reduced office space;
• Reduced support staff; and
• Reduced storage costs.

These potential costs savings should result in fewer billable hours preparing for disclosure, motions, discoveries and trial. If billable hours can be reduced without comprising preparation then Access to Justice should improve.

Last week I received a telephone message from a lawyer in a small county town asking for my help in correcting a mistake in a consent Order I signed in his town when on circuit. I sent him an e-mail explaining the steps he should take to amend the order. After receiving, signing and returning the Amended Order I received an e-mail which stated in part: "I have never received an email from a Judge before." It speaks volumes about how the world has changed, and with it, the vehicles through which access to justice is now available. 

From my observations the legal profession has been slow to fully convert to an electronic environment. Over 98% of all documents created in a law office or used in the litigation are initially created in an electronic format and yet lawyers when they appear in court invariably decide to plead their client’s case in a paper environment.

Litigants who I have talked to concerning their experience in the litigation process have on more than one occasion said to me when referring to the mountains of paper generated by their lawsuit and the costs of the action:

“My lawyer asked me to send him all of banking records, invoices and e-mails which I did on a DVD and the first thing my lawyer did was print the documents and billed me 25 cents a page and the time of his paralegal at $125.00 per hour.”

“We carry on business in an electronic world.”

“We bank, pay bills and make purchases on-line.”

“We had to learn how to carry on our lives and businesses in an electronic world.”

“Why should we be required to incur the additional cost of converting to paper in order to access the justice system.”

“It’s time judges and lawyers learned how to work in an electronic world.”

Many lawyers and judges appear to take the position that electronic technology in the litigation process is best suited for the large document cases which usually come before the court in large urban areas and are handled by lawyers from large legal firms with IT departments. It is true that electronic technology is invaluable in the large document cases, but it is also cost effective in smaller actions in urban and rural areas. It is the individual middle class litigant who as a result of increasing legal fees does not have Access to Justice. Large corporate clients in large documents are not usually denied Access to Justice as a result of legal fees.

From my vantage point as a trial judge I have the impression that litigation counsel continue to conduct their litigation files from day one in a paper environment because:

• Tradition expects it;
• They have been trained in a paper environment;
• It is time consuming to learn how to manage and present their case in an electronic format;
• It is expensive to purchase computers and litigation support programs;
• The Rules of Practice do not yet fully allow for electronic litigation;
• Counsel does not know when a file is opened for the first time if the judge hearing the motions and/or trial will allow counsel to proceed in an electronic environment to the exclusion of paper.

Having been away from the practice of law for 22 years there may be considerations and reasons which I am unaware of which would militate against going paperless. I would welcome your comments on the suggestion that law offices and courtrooms should start down the path of going paperless in order to improve Access to Justice.

I have been a judge of the Superior Court of Justice for 4 1/2 years. In that capacity, I am asked to preside over a wide variety of cases and hearings which include criminal jury trials, criminal non jury cases, family law trials and motions, civil motions and trials, and a number of other issues.

From the outset, I decided to use my computer in all judicial proceedings where I was presiding for a number of reasons. First, I am left handed and do not write quickly. When I was a lawyer, note taking was always problematic for me because I found myself struggling to stay up with witnesses as they testified. Secondly, from my trial experience as a lawyer, I wanted to be able to keep my eye on the witness as much as possible, for often it is a look, or a body movement or some other physical action of the witness that is critical in assessing credibility or reliability of a witness's testimony. Using a computer, I can keyboard while looking at the witness which is impossible when taking written notes in a judicial bench book.

Nevertheless, it was with some trepidation that I decided to use my computer. Many of my colleagues felt that it acted as a barrier between counsel and the judge. I have not sensed that at all. Others felt that they had no place in the courtroom. I have yet to understand that thought pattern, because I find the utility and power of the computer have made my job considerably easier than it would have been otherwise.

The National Judicial Institute has developed a Judges' Note Taking Template which I use exclusively in the courtroom. It is invaluable. It allows me to open a document map in the notes I am making so that I can easily find the evidence of any witnesses or quickly move to an exhibit which has been entered. I am presently in the middle of a lengthy criminal jury trial, and when an issue of evidence comes up about what a witness has said three or four days ago, I am quickly able to access the exact evidence and make my rulings accordingly. It gives me much more control in the courtroom, and counsel recognize that I am taking good notes and usually defer to my comments with little or no argument.

The template allows me to easily mark issues in the testimony of each witness. I am able to push one tab in the template and all the evidence of each witness relating to that issue is summarized in a table which shows me the name of the witness, the page where it is found and the specific note I have made. This is very useful when writing a judgement or preparing a jury charge where there are several issues such as identification, consent, after the fact conduct etc.

The template allows me to create similar tables relating to exhibits, witnesses called, comments I have made during the trial about my impressions of witnesses or particular legal issues. Perhaps the most valuable of these charts is a chronological chart. By entering the date of a particular event in the template, I am able to create a table showing each event in chronological order, the page at which the event occurred and the evidence about each event. It is invaluable when writing a judgment because in explaining the nature of the case and the facts found by the court, a chronological recitation of the facts makes the judgment much more understandable.

When I am hearing motions, I am always connected to the internet in the courtroom. This allows me to have immediate access to all Federal and Provincial Statutes and the regulations passed under each piece of legislation. Needless to say, it also gives me immediate access to Quicklaw, Westlaw, Criminal Spectrum and the various Electronic Bench Books made available on line to the judiciary. I am able to cut and paste relevant legislative provisions or excerpts from case law right into an endorsement which I can often complete while sitting in the courtroom. It is particularly helpful to be able to do it in printed form because the writing is legible and it allows the parties to see the written decision immediately. I have noticed that self-represented litigants particularly appreciate this, because they often need to seek counsel and wish to take the endorsement with them.

I keep all my judgments and rulings on the hard drive of my laptop. They therefore are with me wherever I am sitting. Because we are a "circuiting" court, we often are not working in the same courthouse each day. Nevertheless, I am able to access every ruling I have made and every excerpt of important Supreme Court and Court of Appeal cases I have saved into my "personal library". It has proved t o be invaluable.

I always try to give a written copy of my jury charge to the jury to take with them into the deliberation room. Members of most juries find this very helpful, particularly the Table of Contents which makes it easy for them to find my comments on anything covered during the charge. I have found this has significantly reduced the number of questions posed by the jury once they have retired to commence deliberations.

Finally, by hooking monitors together, I am able to craft judgments using two or three screens at the same time. It is not difficult to have my notes on one screen, the factums of counsel on the second screen and my draft judgment on the third screen. It makes the task of drafting a judgment much easier.

On the 22nd of October 2002 the evidentiary phase of GasTOPS v. MxI commenced in a regular courtroom in Ottawa Ontario. On March 23, 2006 after approximately 300 days of hearing and after approximately 2800 exhibits (70,000 pages) were entered into the record I reserved my decision. Over the next 20 months counsel submitted their written submissions (3500 pages). On September 25, 2009 I released my Reasons for judgment wherein I granted the plaintiff judgment against the defendants in the amount of approximately $11.1 million dollars.

The trial was conducted in a paperless environment and the trial record consists of electronic exhibits saved on an external hard drive lodged with the Registrar. During 2003 I authored a paper entitled “Using Summation iBlaze in the Courtroom – Better Lawyer, Better Judge, Better Justice – The Need for Judicial Leadership”[PDF]. The paper reflected my impressions part way through the trial of using electronic exhibits and creating an electronic record.

At the end of the trial and judgment my initial impressions of the value of electronic technology in the litigation process were confirmed in my mind. Over the next few months I propose to write a few entries dealing with the use of electronic technology in the litigation process and with Simon’s permission have them appear on Slaw, with the hope that such posts will spark a full discussion between the judiciary, the legal profession, academics and law students on the value and use of electronic technology in the judicial system. Such discussions will help me as a member of the judiciary and other judges consider if electronic technology can increase access to justice by reducing legal fees.

I am sure that Simon would be grateful to receive comments and other material from the judiciary and legal profession and any other interested persons on this subject which would greatly add to the discussion and assist in the determination of whether electronic technology can be a benefit to the judicial system.

I intend to write entries on:

• Access to Justice and electronic technology
• Advocacy and electronic technology
• Justice and electronic technology
• Establishing an electronic courtroom without going bankrupt
• Why most counsel and the majority of the judiciary resist the use of electronic technology to the exclusion of paper
• Persuading the trial judge to judge in an electronic environment

I personally believe that the use of electronic technology will reduce legal fees and result in better lawyers, better judges and better justice.

Justice B.T. Granger

This month our guest blogging institution isn't a firm, but a group of judges from the Ontario Superior Court of Justice. As always, when we have an institutional guest blogger, we'll identify the guest posts with a banner. You'll see the one below starting tomorrow, Monday:

We hope you'll join in and give our guest the benefit of you opinions.

Fifty years ago, if we were to ask Canadians, “What are your expectations of government?” the answer would likely be: “I expect that my government should make good decisions.” Meeting this expectation by making laws, regulations and policies that treated everyone the same seemed an acceptable standard of fairness.

Within the next 20 years, provincial ombudsman offices came into being in Canada and began responding to complaints about instances where those good substantive decisions were not being made – but something else was happening too. As Canada’s population grew and society became more complex, governments at the federal, provincial and municipal levels were becoming larger and more complex as well.

Now, in 2009, if we were to ask people that same question, “What are your expectations of government?” the answer would be far more complicated. People today still expect their government to make good substantive decisions, and they expect much more. People will also say that they expect those decisions to be made using an open, transparent process that involves them, at least for those decisions that affect them. In addition, they will say that they deserve to be treated with respect during that process.

People’s expectations today can be diagrammed on a triangle. The three sides of the triangle are the substantive – what we decide, the procedural – how we decide, and the relationship or psychological – how we are treated while the decision is being made. Expectations are higher, the bar has been raised, and governments need to recognize that different and better mechanisms are needed to meet those expectations.

The quintessential work of a parliamentary ombudsman requires the application of fairness principles to the decisions, actions and general conduct of the public service. These principles require that those decisions, actions and conduct be reasonable; consistent with law; just; and not oppressive or improperly discriminatory.

As a practicing lawyer for over twenty years, I am constantly reminded of the benefits of judicial and quasi-judicial avenues to determine citizens’ legal rights. These benefits include a structured procedure to determine legal rights; access to and the application of established precedents, a rich and sometimes codified body of principles to determine what evidence is available to the decision maker and the right to have detailed written reasons provided when legal rights are determined.

The practice of a parliamentary ombudsman affords citizens with a variety of benefits that are distinct from those available when seeking the determination of legal rights. They are:

Informality: But for making a complaint to the ombudsman’s office, there are no prescribed mechanisms for seeking redress against a government body. As legal rights are not being determined, there is no requirement for the strict application of the rules of evidence.

Flexibility: Ombudsman are not constrained by precedent. Each citizen complaint is assessed against fairness principles. Creativity, ingenuity and an appreciation of nuisance can all be realized through that assessment process.

Speed: The absence of the application of strict rules of evidence and precedent permits an ombudsman’s office quick access to decision makers and a focused and fast understanding of the issue in dispute and the pragmatic means for resolving it.

The applications of these fairness principles help ensure that the reasonable expectations of citizens with respect to their public bodies are met without incurring the weight of the judicial or quasi-judicial process.

Representing the best interests of the client, the adversarial system, and legally enforceable court decisions — these are the signposts on the well-travelled road to justice in the common law system. All you need is access to the resources necessary to pursue a case through to the end of the process.

But what if you lack those resources?

In the arena of administrative justice, the ombudsman’s office is a sort of “soft-power” alternative to the “hard-power” of the legal system. Accessible via a 1-800 phone call and available free of charge, this route may be the only option available to the most vulnerable and dependent in our society.

The ombudsman approach does not involve representing a client, an adversarial process, or a legally enforceable decision, yet it results in fair treatment for individuals from public authorities — administrative justice.

A somewhat quixotic mix of law, social policy and public administration, this approach emigrated to Canada (and other common law jurisdictions) from its Scandinavian homeland and natural civil law milieu in the 1960s and 1970s. It takes what might be seen as a collectivist rather than an individualistic approach to administrative justice, operating on the premise that a democratic society works better if every person is treated fairly by public authorities and that an independent agency is necessary to make sure that happens.

Consultative and resolution-oriented, but mandated to speak truth to institutional and political power and comment publicly on issues of unfair treatment — to point out if the emperor is not wearing any clothes — the ombudsman’s office has been described as both the conscience of the state and the champion of the citizen. Perhaps it is not a bad travelling companion to have on the road to administrative justice.

The Quebec Ombudsman is entrusted by the National Assembly with supervising the administration of government, protecting rights and strengthening the rule of law and the democratic values that underpin relations between the government and its citizens.

Under section 26.1 of its constitution act[2. Public Protector Act, R.S.Q., c. P-32],

the Public Protector shall notify in writing the chief executive officer of a public body where he is of opinion that the public body (…) has acted in an unreasonable, unjust, arbitrary or discriminatory manner (…).

In the words of Professor Pierre Issalys: “More than any of the other terms used in section 26.1, the word ‘unreasonable’ appeals to the discretionary authority of Le Protecteur du citoyen.”[3. Pierre Issalys, Observations sur le document de travail “L’intervention en équité,” (PDF) prepared for the Public Protector by the Committee on Equity and Reasonableness, May 2003, p. 10 (our translation).]

The rule of law normally guarantees justice, yet in individual cases, strictly enforcing the law may upset human conscience in creating injustice or disproportionate consequences. The notion of equity hence refers to the imperatives of conscience proper to our individual values. Drawing on the spirit of the law, it seeks the just application of legal standards in accordance with their purpose.

In practice, the equitable intervention by the Ombudsman can fulfill a triple role by helping correct excessively rigid rules, flesh out rules that are incomplete, and interpret rules that are insufficiently clear.

Equity issues are exceptions, and certain precautions must be taken to avoid arbitrariness and ensure that an intervention is appropriate. These criteria are threefold: respecting the legislator’s intent, evaluating the seriousness of harm, and determining the appropriateness of the recommendation.

Equitable intervention is often the only option available to a certain category of citizens struggling with problems beyond their control or experiencing special situations. In this light, equity provides a unique and indispensable recourse that is part of our obligation of mutual solidarity toward each other.

________________________________________

Ombudsmen are a rather strange breed of public official –- we have very robust investigative powers, such as the ability to examine witnesses under oath and to gain entry into government premises. But we have no powers of enforcement. We cannot impose a solution or make our recommendations binding.

Nevertheless, we can recommend resolutions, not only to address individual grievances, but also to promote broad policy changes. In this way, we have the potential to positively affect thousands -– even millions –- of citizens.

Our key to success is the use of moral suasion -– persuading our governments to do the right thing. To do this, we must maintain high standards of independent investigation and speak out publicly about our findings.

When I became the sixth Ombudsman of Ontario on April 1, 2005, my office had narrowly escaped the chopping block of government cost-cutters. The office had been flying under the radar for far too long, shying away from the public eye.

I immediately set out to establish an office that would deliver big value on a small budget. We created the Special Ombudsman Response Team (SORT) to conduct systemic investigations into high-profile issues with a potential for broad public policy impact. Many of SORT’s investigations, such as probes of the Ontario lottery system and the province’s newborn screening program, have resulted in major reforms. This benefits the province as a whole –- it demonstrates to citizens that their government cares.

University of Ottawa management professor Gilles Paquet has urged ombudsmen to modernize their approach along these lines. In an article published this month in Optimum: The Journal of Public Sector Management Prof. Paquet argues that ombudsmen need to tackle the issues revealed in the complaints we investigate

with an explicit intention to unearth and expose the source of the problem, and to become the architect of better governance arrangements capable of eradicating the cause of the difficulties.

This is our inspiration for Good Governance Week –- to strive to elevate the role of ombudsman from a mere complaints department to an “architect of better governance.”

As our guest this month we have not a firm but the Ombudsmen from the provinces of Ontario, Quebec, British Columbia, Newfoundland and Labrador, and Saskatchewan.

Also, we are inviting our guests to join us a week earlier than usual this month because the Canadian Council of Parliamentary Ombudsman chose this week to commemorate the 200th anniversary of the modern parliamentary ombudsman — the first one was established in Sweden in 1809 — and to raise awareness of the important work that ombudsmen do today.

Speaking of "ombudsmen," I should record here that the plural of "ombudsman" is a somewhat vexed matter. Some use "ombudsman" as both plural and singular (see, e.g. "Canadian Council of Parliamentary Ombudsman"; some, like Ontario, use "ombudsmen"; and in French the plural is "ombudsmans." The Swedish plural is "ombudsmän".

Canada first started establishing ombudsman offices in the 1970s. Today, every province has one except PEI; and Yukon territory has one as well, although Quebec's is called the "Protecteur du citoyen" (citizen's protector) and Newfoundland and Labrador's is called "Citizen's Representative" — both faithful translations of the Swedish word "ombudsman."

The coming week is being called "Good Governance Week" or "Fairness Week" in the various provinces, and they're marking the occasion with events such as speeches, open houses, new publications, and public engagement such as participating in Slaw.

As always, you'll know a post is from our guest because of a banner like the one below, which will appear at the top of the post and which will identify and be linked to the website of the ombudsman writing.

On August 25, 2009, the Alberta Securities Commission dismissed an application by TransAlta Corporation to cease trade the shareholder rights plan of Canadian Hydro Developers Inc. The TransAlta take-over bid for Canadian Hydro Developers was scheduled to expire, unless extended, on August 27, 2009 and was effectively blocked by the rights plan. Although the impact of this decision will not be clear until the ASC releases its written reasons, it may be further evidence of a shift by the Canadian securities regulators towards providing boards of directors with greater deference in resisting unsolicited take-over bids.

Shareholder Rights Plans

Shareholder rights plans, or poison pills, are adopted by public issuers to defend against an outside party acquiring control of the issuer through an unsolicited take-over bid or continued market or private share purchases that are exempt from the take-over bid rules. If a shareholder rights plan is triggered, additional securities are issued to all shareholders, other than the potential acquirer, for nominal consideration. As a result the ownership position of the potential acquirer is diluted relative to all other shareholder.

The Canadian Regulatory Approach

As set out in National Instrument 62-202 Take-Over Bids – Defensive Tactics, the guiding policy in Canada is that the outcome of a take-over bid should be decided by the shareholders of the issuer, not the board of directors or management. Accordingly, shareholder rights plans are generally only permitted to operate for a limited time to provide the incumbent board and management with sufficient time to pursue alternatives to maximize the return to shareholders and to fully inform shareholder regarding their options. Accordingly, the securities regulatory authorities in Canada will generally exercise their public interest jurisdiction to cease trade and prevent the operation of a shareholder rights plan. The central question is when the regulators should intervene.

Increased Deference to Boards of Directors?

As discussed above, it is too soon to tell whether the ASC’s decision in Canadian Hydro Developers is a departure from the generally approach to shareholder rights plans. It has been reported that the chair of the ASC panel expressed the view that if TransAlta extends the expiry of the bid, the shareholder rights plan should come to an end. However, dismissing the TransAlta application where it was not clear that the bid would be extended, may suggest a willingness to allow the board of directors, rather than the shareholders, to determine the outcome of a take-over bid. If this is the case, the decision, when viewed together with the ASC’s 2007 decision in Pulse Data Inc. and the Ontario Securities Commission’s May decision in Neo Material Technologies Inc., may constituted a trend towards greater deference to boards of directors.

In Pulse Data the ASC declined to exercise its public interest jurisdiction to cease trade a shareholder rights plan, primarily because a large majority of the shareholders of the issuer had voted to adopt the plan at a time where the take-over bid was pending with full disclosure of the implications of the shareholder rights plan. The ASC was:

"reluctant to interfere with a decision of the Pulse Board that has a fiduciary duty to act in the best interests of Pulse Shareholders, particularly when that decision had very recently been approved by informed Shareholders."

Informed shareholder approval was also the key issue in the Ontario Securities Commission’s May 11, 2009 decision to allow the Neo Material Technologies Inc. shareholder rights plan to continue in force.

In that decision, an existing shareholder of Neo Materials that controlled approximately 20% of the outstanding common shares was bidding to acquire up to an additional 9.9% of the shares. Neo Materials adopted a shareholders rights categorically precluded any take-over bid for less than all of the outstanding shares. The adoption of this rights plan was approved by a large majority the shareholders while the bid was outstanding.

The OSC has not yet issued the full reasons for its decision. However, the OSC panel did indicate that its decision was influenced similar considerations as outlined in the ASC’s Pulse Data Decision.

Potential Implications

The implications of the Canadian Hydro Developers and Neo Material Technologies decisions will not be clear until the regulators release their full reasons. However, these decisions may indicate a trend towards greater deference to boards of directors in resisting take-over bids. Canada’s take-over bid regime is considered to be very bidder friendly, particularly in comparison to the United States. The recent shareholder rights plan decisions could demonstrate a shift in this position.

The Ontario Government has recently passed innovative legislation to stimulate investment in renewable energy, green jobs and energy conservation and demand management. One of the key features of the Green Energy and Economy Act, 2009 (“GEA”) are “Feed in Tariffs” for renewable generation such as wind, solar, biomass and hydro-electric power. This regime of Feed in Tariffs for renewable power has proved successful for many European jurisdictions that have been leaders in the development of renewable power projects.

At the present time, the Ontario Ministry of Energy and Infrastructure is working hard to draft the key regulations to support the GEA to ensure a smooth implementation schedule. This will allow the government to proclaim into force those sections of the GEA that are of critical concern to Ontario’s energy industry. In addition, the various regulatory agencies of the Ministry of Energy and Infrastructure are also working hard to develop the specific programs and initiatives required to support the implementation of the GEA. For example, the Ontario Power Authority is drafting rules in respect of the Feed In Tariff regime for generators and a “micro” Feed in Tariff regime for local electricity distribution companies interested in making small scale investments in generation supply for their customers.

The Fall will be extremely busy for industry participants as the Ministry of Energy and Infrastructure, and the regulatory agencies, release draft regulations and program rules to turn the government’s ambitious green agenda into a reality for the energy industry.

Michael Jackson's sudden death and the skirmishes over who should be his executors, or remain so, should give you pause. You would not want your beneficiaries fighting over your estate and you should want executors with the necessary expertise to manage your assets after you are gone.

Not too much can be done to prevent the former. Jackson’s Will has a "no contest" clause, such that if a beneficiary takes issue with how much he or she is to get, they get nothing. Still, this has not prevented Jackson’s mother from seeking to have herself appointed as an executor or to try to obtain a say on decisions affecting estate assets. Or, from his two named executors from pushing back. While it is questionable whether a broad “no contest” clause would be enforceable in Canada, particularly where it ousts the jurisdiction of the courts, people still have them put in wills.

Jackson took care to appoint two professional persons with the skills-sets and abilities to look after his unique assets as a music industry powerhouse. A third such person renounced the right to act as an executor, or fled, before Jackson died. Perhaps he had some share of the litigation that would take place on Jackson’s death. The two remaining executors seem ideally suited for the job. Similarly, Jackson’s mother seems ideally suited to be guardian of his children. The idea of appointing multiple executors, each with separate responsibilities, or special executors with decision-making power over particular aspects of an estate is not a new one. Many authors have named a literary executor, just as intellectuals or artists have named a similar special executor to safe-guard and oversee their works.

Executors can have incredible power over a deceased's legacy. Jackson's executors are already reaping hundreds of millions of dollars for the estate with the business deals they are making. However, if they make bad decisions, the value of estate assets, such as Jackson’s back-catalogue or the reproductive and licensing rights to his works, image and name could be impaired. Given the sums involved, there could still be much to fight over!

It is fashionable for class counsel to plead “waiver of tort” as a common issue alleged to be certifiable in product liability class actions. Waiver of tort refers to a plaintiff’s election at a common issues trial to have recovery quantified not by provable tort damages but rather by the defendant’s gain arising from the alleged tortious act.

As merits-based classes defined by injury are impermissible in common law provinces, waiver of tort is the glue to hold together a claim on behalf of all users of a product — without regard to whether it is defective or causes injury. The plea is a sentinel that the plaintiff and an overwhelming majority of class members have not suffered any compensable injury. Where a plaintiff is injured, tort damages will never be waived. Any profit will necessarily be miniscule compared to the loss from bodily injury.

In no Canadian case has waiver of tort been allowed to proceed as a stand-alone claim, which might have the practical effect of protecting the class representative from documentary production.

To succeed at trial, a class claiming waiver of tort will likely have to show fraud or something akin to a total failure of consideration, based on wrongful conduct going well beyond negligence.

There is no Canadian authority for the proposition that a class can refuse to prove loss and instead claim profits by waiving the tort [see Serhan (Estate) v. Johnson & Johnson, 2004 CanLII 1533 (ON S.C.), rev'd 2006 CanLII 20322 (ON S.C.D.C.), leave to appeal denied]. The issue may be tried for the first time in 2010. To the degree profit disgorgement were to be ordered without a corresponding loss, the award would arguably conflict with Canada’s rules limiting punitive damages [see Whiten v. Pilot Insurance Co., [2002] 1 S.C.R. 595, 2002 SCC 18].

That's the lesson from a recent Ontario Superior Court case.

The plaintiff was hired by the defendant on November 28, 2005 for the position of full-time receptionist and was promoted to the position of Executive Assistant in 2008 at an annual salary of $36,000. Her employment was terminated on November 28, 2008 at which time she was presented with a severance package that provided, in part as follows:

You will receive an additional five months pay in lieu of notice of termination as per our obligations under the Employment Standards Act of Ontario.


The Employment Standards Act would have provided the plaintiff with only 3 weeks pay, significantly less than 5 months pay. The plaintiff signed and accepted the terms of the offer. A few days later the plaintiff attended at the workplace to return some property of the employer at which time she was advised that there was a mistake in the offer.

The plaintiff was told that she "… would only be receiving three weeks’ termination pay. The plaintiff was asked to sign a release which she did not do."

The question was whether there was an enforceable agreement that the plaintiff could enforce?

The Court found that such a contract existed:

The letter represented the employer providing consideration it owed to the employee. In the absence of any demonstrated intention of the employer to deal separately with its common law obligations, the submission that the letter was intended to deal only with the statutory obligations of the employer cannot stand. The letter was to be the completion of the contract. It represented not only the fulfillment of the employer's statutory obligations, but also its effort to conclude its common law responsibility to provide reasonable notice or pay in lieu of that notice. The acceptance of the letter would represent the completion of all the employer's obligations. ….


So, the lesson is clear. Take time to review the terms of any termination letter or, for that matter, any offer. Any contract requires that three things be present (1) an offer, (2) acceptance and (3) consideration. Someone mentioned to me yesterday the master carpenter's motto "measure twice, cut once". That can be modified to fit the employment model as well. For a more detailed discussion of terminations generally, including termination clauses, see this post on my blog, Thoughts from a Management Lawyer.

Our firm guest blogger this month is Borden Ladner Gervais LLP, who have kindly provided us with this firm profile:

At Borden Ladner Gervais LLP (BLG), It Begins With Service.

BLG is a leading, full-service, integrated national law firm focusing on business law, litigation and intellectual property solutions for our clients. With more than 750 lawyers, intellectual property agents and other professionals in Calgary, Montreal, Ottawa, Toronto, Vancouver and Waterloo Region, clients turn to us for assistance with their legal needs, from major litigation to corporate finance and patent registration.

Our goal at BLG is to provide our clients with the best service, by the best professionals and support staff. We are accessible to our clients and proactive in uncovering and serving their needs. BLG’s team approach provides the best resources based on location, expertise and experience to develop and articulate solutions to legal challenges. BLG’s strength is the ability of its professionals to apply our breadth and depth of legal experience to clients’ businesses, whether their needs are in a single location, across North America or overseas.

BLG provides advice to a variety of regional, national, and multinational businesses across a wide variety of sectors. In addition, we represent public institutions such as universities, governments and agencies, health-care facilities including hospitals as well as business, trade, and charitable groups.

BLG’s professionals and staff take pride in the communities we are a part of and members of the Firm are involved in BLG’s community programs including pro bono legal services, fundraising and volunteer service.

For more information about the firm, its practice areas and community support go to www.blgcanada.com.

Their posts begin tomorrow and can be easily identified by the presence of the banner below, which is always linked to the firm's website.

UPDATE: I've just discovered that BLG is on Twitter. You can follow them at @blglaw. Hope they'll be RT-ing their firms guest posts.

Wrapping up a week of Guest Blogging from Heenan Blaikie lawyers across the country, we're going to end by focusing on big changes at Heenan Blaikie's Toronto offices.

After nineteen years at Royal Bank Plaza, the firm is moving 400 metres up Bay Street to the new Bay Adelaide Centre.

The move presents all sorts of practical and logistical challenges. Soon to join us at Bay Adelaide will be Goodmans and Faskens. They'll be watching carefully to see how we move the Library. Physically packing and transporting an entire law library is not a trivial undertaking. Here is a picture from midweek when Laurel Murdoch and her colleagues were hard at work helping to pack the whole thing up, and wondering whether it would all work out.

Not content with the physical challenges of the move, we've also taken this opportunity to adopt a new cataloguing system. We've had for some time a home-grown system that can best be described as interestingly different. For lawyers and law students used to the Library of Congress system, it's taken some adapting. The old system is idiosyncratic and tracks the logic of the civil law. However, come Monday week we'll be on the modified KF system used by the vast bulk of Canadian law libraries

I'll post a picture of the new library after we move in. Here is the Bay Adelaide Centre:

We'll have new VOIP phones to cope with too, as staff unpacking will face the challenge of phones from this century. Our new offices open on the Tenth of August. Our technology support staff have to move all of the hardware and we have a staggering number of crates and boxes which are being taken down, along and up, to the new offices. But that's ten days away. Until then, Heenan Blaikie Toronto (all 150 lawyers and an equal number of support staff) is operating as a virtual law firm. We're open for business. We just don't have any physical offices. With BlackBerrys and web-based support systems, one can do an amazing amount without actually being there. I'm working out of the Great Library today.

I've always liked the architecture of the Royal Bank Plaza – and have indeed practiced there for 23 years, on and off. Here it is shimmering in the sun.

Sometimes new law is very old. According to the OED, the term plagiarism was first applied to music in the Monthly Magazine of 1797, when a composition was described as “the most flagrant plagiarism from Handel" (The Imaginary Museum of Musical Works by Lydia Goehr, OUP). Since then a pantheon of musicians have been accused of lifting melodies – from Jerome Kern (Fred Fisher Inc. v. Dillingham, 298 F. 145, 1924.), George Harrison (My Sweet Lord costs over half a million 1981 dollars to settle: Bright Tunes Music Corp. v. Harrisongs, 420 F. Supp. 177 (S.D.N.Y. 1976)), Mick Jagger (co-author with KD Lang), Stevie Wonder, I Just Called, and this week – Men at Work. It's up at Austlii as Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Limited [2009] FCA 799 (30 July 2009).

For lawyers, there's a wonderful digital archive at Columbia. The archive is very eclectic – from Izzo (H.O.V.A.) by Jay-Z, through You'd Be So Nice To Come Home To by Cole Porter, When the Red, Red, Robin Comes Bob, Bob, Bobbin' Along, We Are The World, to Ready to Die by Notorious B.I.G. All have been litigated. Tip of the hat to the bloggers at UofA for a Morrissey discussion. In China the band Flower scored a hit with their popular song "Xi Shuashua" at the end of 2006, which does somewhat resemble the Japanese band Puffy's song "K2G Rushing to You". The use of the archive can be well seen in its page on CCC leader, John Fogerty's travails

Originality in music is of course relative: Your riff or mine? A Sixth Circuit decision tried to sort out the real from the fake. But no music can really claim to be original. Peter Gutmann. American Lawyer 27.9 (Sept 2005): p95(3).

There are only a handful of Canadian cases:

The most famous is about Hagood Hardy's The Homecoming, which Justice Douglas Carruthers once described to me as the most fun that he had had in a courtroom. In Drynan v. Rostad (1994) 59 C.P.R. (3d) 8, CarswellOnt 2217 Ontario Court of Justice (General Division) [Small Claims Court] the case turned on a CBC theme. In July 1989, Drynan composed a musical work entitled Filion Family Welcome and recorded it on an audio cassette. A year later Rostad composed Here We Are On The Road Again, which became the opening theme for a CBC series.

The tests are fairly clear: Francis Day & Hunter Ltd. et al. v. Bron, [1963] 2 All E.R. 16, and adopted by Denault J. in Grignon v. Roussel et al. [1991] 38 C.P.R. (3d):

It is well established that to constitute infringement of copyright in any musical work, there must be present two elements. First, there must be sufficient objective similarity between the infringing work and the copyright work or a substantial part thereof for the former to be properly described not necessarily identical with, but as a reproduction or adaptation of the latter. Secondly, the copyright work must be a source from which the infringing work is derived. It need not be the direct source. There must be a causal connection between the copyright work, i.e. the copyright work must be shown to be a causa sine qua non of the infringing work.

Belgium seems to be developing a reputation as a litigation centre in the area. Last August, the Brussels Court of Appeal rejected a plagiarism claim about US rapper Eminem's song "Cleanin’ Out My Closet", Under Belgian law, plagiarism must be assessed on the basis of the perception of the disputed works by a general audience and claimants must demonstrate substantial similarities between the works. But Michael Jackson's hit song "You Are Not Alone", written by singer-songwriter R Kelly, was banned from Belgian airwaves after the same court held that it was a tad too similar to an earlier song by Belgian songwriters Eddy and Danny van Passel. Amazing that the Great One stayed up at night listening to Belgain pop songs. Of course so did Madonna whose song "Frozen" contained elements of an earlier work by a Belgian composer.

Thanks to Carissa L. Alden in the Cardozo law Review for pointing to a great analysis by David Bollier in Brand Name Bullies which he shows just how rich the borrowing has been, even in the days before sampling. “‘Good Night Sweetheart’ (1931) is based on themes from Schubert’s Symphony in C and Liszt’s preludes”); “‘The Lion Sleeps Tonight,’ also known as ‘Wimoweh’— recorded by the Weavers in 1952 and the Tokens in 1961—is based on a traditional African song”); and folk songs based on religious tunes (“[T]he melody of [Bob] Dylan’s first big hit, ‘Blowin’ in the Wind,’ was based on an antislavery spiritual, ‘No More Auction Block’.

Paul Goldstein in Copyright: Principles, Law and Practice also cites a brief from a musical infringement case which noted that “the following well-known compositions all contain five to seven consecutive pitches in common with each other: As Time Goes By; The Star Spangled Banner; O Holy Night; Three Blind Mice; God Save the Queen; and Stranger in Paradise.”

Steven Fox, Program Notes to “Gemütlichkeit von Salzburg” (Oct. 23, 2007) shows how Michael Haydn cribbed from Mozart in his Requiem pro defuncto Archiepiscopo Sigismundo, MH155 “how different the times were, when what might be considered plagiarism today was nothing but the greatest honor one composer could pay to another in the 18th century”).

Men at Work are in good company.

This week, the entertainment group at Heenan Blaikie has been commenting on various developments in the sector. But I thought it might be fun to ask how media and entertainment lawyers use the new media.

So I asked the group:

What sites are on your bookmarks, that you check daily or that you get email updates from or RSS feeds?

What are the must reads for clients? Does everyone read Variety or Hollywood Reporter? Is there an electronic equivalent?

Do you or your clients use social media? Facebook? MySpace? Linkedin? Legalonramp? Twitter? Follow any blogs? Contribute to any blogs? Or is that just too Silicon Valley passé?

The answers reveal that this group is pretty plugged in. And that they're focused on the same issues and media that the clients follow.

Some examples:

RSS anyone?

I spend a lot of time on Wired for new media buzz and I also receive daily emails from nextMEDIA. I get the Playback and Variety emails as well.

Here's a smattering of my industry-related web links: Mediacaster Magazine/, Cartt.ca (which publishes breaking news, in-depth feature stories, analysis and opinion geared specifically towards the men and women working in the cable, radio, television and telecom industries in Canada), our old friend Michael Geist's site, DSLreports.com (the largest online community based on interest in consumer broadband), Forbes Media site/, from London the Financial Times, the Silicon Alley Insider, the Wrap, and from the NYT the Vulture.

In the Blogosphere, Davis Wright Tremaine's Washington, DC office Broadcast Law Blog, and Google's Public Policy Blog which has Google's take on issues in government, policy and politics.

What's on your Ipod?

Also, I rely on daily/weekly podcasts including Slate cultural gabfest, Filmspotting, Creative screenwriter, KCRW's The Business, Guardian media talk USA, Npr culturetopia, Npr pop culture, On the Media -WNYC, Bloomberg on economy.

Finally, for the weather forecast. Very cool.

For industry news I also go to the hollywood reporter; Nikki Finkes Deadline Hollywood Daily and screen international who also send me daily e-mails.

For entertainment news, i go to www.chud.com and aintitcoolnews.com.
I receive the electronic Daily Variety, also review daily Playback online for Canada.

Social media?

I use Linked In, Plaxo and Facebook. I also make extensive use of imdb.com for information about people and projects. In addition, I use www.movieset.com, more entertainment than any legal content.

I use facebook, as do some of my clients. I also contribute to knowthemusicbiz.com (music business blog). I regularly check Hollywood Reporter and billboard.biz.

And finally, from the West, "I spend no time on Facebook at work. Zero. 'Cause that's not allowed".

Courtesy of my friend and partner, Subrata Bhattacharjee, today is the last sitting of the Judicial Committee of the House of Lords (you can watch the feed here. So farewell to a court that has provided a vast range of legal judgments from Attwood v. Small in 1838, through Rylands and Fletcher, through M'ALISTER or DONOGHUE (Pauper) v. STEVENSON. In October, a Supreme Court will start sitting to hear appellate matters.

In this Guest Week on Media and Entertainment law at Slaw, it only seems fitting that they'll spend part of the last day on pop songs:

“A Whiter Shade of Pale” is placed high in lists of the greatest songs of all time. Procol Harum’s record in May 1967 was an instant smash hit. Sales ran into millions. The musically literate judge, who tried this case, knew it. He held that the song had achieved cult status. There are over 770 versions of it. The introductory bars are used as mobile phone ring tones. The melody would even strike a chord with an unworldly judge in its echoes of JS Bach, Wachet Auf and the second movement of his Keyboard Concerto No 5 in F Minor.

Who wrote the music? Who owns the copyright? These are the questions in the case.

The final appeal hearings and last ever judgments by the Law Lords take place in the Lords Chamber. You can watch the final, unique proceedings on ParliamentLive.

30 July: appeal hearings

Joint appeal hearings from 10.30am and 2pm on the right of appeal against the Home Office’s refusal to revoke a deportation order from within the UK:

• BA (Nigeria) (FC) (Respondent) v Secretary of State for the Home Department (Appellant) and others
• PE (Cameroon) (FC) (Respondent) v Secretary of State for the Home Department (Appellant) (Consolidated Appeals)

30 July: House of Lords judgments

From 4.30pm, the Law Lords give the last ever judgments of the House of Lords in seven cases on points of law:

• concerning a duty owed by auditors: Moore Stephens (a firm) (Respondents) v Stone Rolls Limited (in liquidation) (Appellants)
• concerning a term in a contract of reinsurance: Lexington Insurance Company (Respondents) v AGF Insurance Limited (Appellants) and one other action and Lexington Insurance Company (Respondents) v Wasa Insurance Company Limited (Appellants) and one other action
• on a claim for authorship and copyright in Procul Harum's song ‘A Whiter Shade of Pale’: Fisher (Original Appellant and Cross-respondent) v Brooker and others (Original Respondents and Cross-appellants)
• on interpretation of the test for capacity to consent or to refuse a sexual touching: R v Cooper (Respondent) (On appeal from the Court of Appeal (Criminal Division))
• on the power to make orders against foreign directors for the examination of foreign assets: Masri (Respondent) v Consolidated Contractors International Company SAL and others and another (Appellant) another
• on compensation for compulsory acquisition of land under the Land
  Compensation Act 1961: Transport for London (London Underground Limited) (Appellants) v Spirerose Limited (in administration) (Respondents)
• concerning clarification as to whether the husband of a sufferer of incurable, progressive multiple sclerosis would be prosecuted should he help his wife to die: R (on the application of Purdy) (Appellant) v Director of Public Prosecutions (Respondent)

What's happening?

• YouTube: From House of Lords to Supreme Court
• Parliament News: From House of Lords to Supreme Court

Further information

• Parliament News: Work of the Law Lords
• Judicial Work
• Judicial Business
• House of Lords judgments
• About Parliament: Judgments
• About Parliament: Law Lords
• Briefing: Judicial work of the House of Lords (PDF)

In today’s financing climate, where pre-sales are more difficult than ever to attract and GAP financing requires two or three times coverage, the holy grail of many independent producers has become “soft money”- funds which are generated by means other than sales of a product, such as tax credits, government subsidies and equity investments. Canadians have become very good at chasing soft money, and that’s why Canadians are tops in co-producing.

In the context of reduced financing sources, it stands to reason that if accessing soft money in one country is good, then accessing soft monies from two (or even more) countries is great. Enter the world of international co-production treaties, which is in many cases the only way to double dip into the soft money schemes available in multiple countries.

F.A.Q.’s of Co-productions

Who Decides if a Co-Production is an “Official Treaty Co-Production”?

In Canada, the certification of Official Treaty Co-Productions is handled by the Co-Productions office of Telefilm Canada, the Canadian government body responsible for receiving and evaluating applications for certification of treaty co-productions. When a production is certified as being made in accordance with a co-production treaty, the subject production gains “Official Treaty Co-Production” status.

So which International Co-Production Treaties does Canada Currently have?

Canada is a party to 55 co-production treaties with 53 countries for film and television works. This list notably excludes the United States. Look to http://www.slaw.ca/?p=10744 and by Michael Spanier

One of the most important aspects of film and television production is the clearance procedure. A little known fact about entertainment lawyers is that we spend much (okay…some… well, precious little actually) of our day in our offices watching movies. Or cartoons. Or television shows. All in the name of "E&O Clearance Procedures."

The importance of ensuring that a production is clear from an errors and omissions perspective cannot be emphasized enough. From the day a producer acquires the rights to a script, an underlying novel or a real-life story, the E&O journey begins. Every single character's name … [more]

Celebrities thrive on the oxygen of publicity. As Wilde put it, "there is only one thing in the world worse than being talked about, and that is not being talked about". Between the tabloids and the celebrities, goes on a complex galliard of hunt and court.

The Guardian earlier this month revealed the lengths that the News of the World was prepared to go to track celebrities and then settle cases where its activities might have surfaced – the documentary evidence is fascinating (though the file is a hog). The paper had allegedly intercepted calls involving former deputy prime minister John Prescott, former culture secretary Tessa Jowell, celebrity cook Nigella Lawson, actress Gwyneth Paltrow, London Mayor Boris Johnson, comedian Lenny Henry, singer George Michael and the late Jade Goody. The fullest response from News Corp has been in The Times.

I've referred in earlier Slaw posts on Catherine Zeta-Jones and the adulterous soccer player to the extraordinary growth of English judge-made law protecting the privacy of film and media celebrities. A newsletter article for the ABA brings the cases up to date. In an extraordinary direct attack by Paul Dacre of the Daily Mail the editor attacked the courts for their impact on the press' ability to expose hypocrisy and on freedom of speech. Four silks came to the defence of the leading privacy judge the next day. The trend has not made it to Canada. And the First Amendment has teeth in protecting the media in the States and on Facebook.

The paparazzi privacy cases are well summarized by the BBC in a profile of High Court Judge David Eady, the judge who has put more of a personal stamp on an area of the law than anyone since Lord Denning's early decisions. Of course he's not the only judge who has written on privacy, and there are three important decisions from the House of Lords (Mrs. Wainwright, Naomi Campbell, the Loreena McKennitt decision from the Court of Appeal and Princess Caroline's case before the ECHR.

Since then Hugh Grant, Liz Hurley and her husband, won major damages, Sienna Miller, Jonathan Ross, J.K. Rowling, Simon Cowell, Lily Allen and Amy Winehouse have all toddled off to see their solicitors and drop a few statements of claims.

All the action in media litigation appears to be happening in London. Bindmans yesterday launched an action on behalf of two journalists against the Metropolitan Police for obstructing reporting.

Back in Canada, tort actions for invasion of privacy may survive motions to strike but die at trial. And the stars can attend TIFF in six weeks without fear of media harassment.

Many of us think of Google merely as your friendly, neighbourhood search engine. But Google is more than just a home page. Questions are increasingly being raised about Google’s dominance in several areas including on-line advertising, privacy and, more recently, copyright (read: “Google Books”). Google is now coming out swinging even on telecommunications policy matters, having appeared at the CRTC’s recent hearing on ISP Internet tariff management practices (ITMPs). Konrad von Finckenstein, the Chairman of the CRTC, was pleased that Google “as one of the large players on the Internet”, was actively participating in the process. In asking “Is Google good for Canada?”, the Financial Post noted that “the message was clear: in any national conversation about the state of the Internet in Canada, Google is now a necessary participant.”.

Before the CRTC, Google raised some familiar arguments on “net neutrality”. It cited the 2008 finding by the FCC that Comcast, the largest U.S. cable company and a major broadband service provider, had improperly “managed” traffic through application-specific throttling of BitTorrent, an open source peer-to-peer (P2P) networking protocol. The FCC ruled that Comcast’s actions were “discriminatory and arbitrary” and in violation of FCC policy and had effectively denied subscribers access to content.

Google advocates “innovation without permission [which] requires a robust, open Internet”. Google also claims that its view was “echoed” by consumer groups, Internet policy advocates, content producers and distributors. Google’s objective is to further “the power of an open Internet to share insights, test arguments, and facilitate meaningful civic engagement — all in cool, unexpected ways”. Google opposes application-specific measures to target bandwidth-heavy P2P applications. These ITMPs effectively transfer the permission to the carrier to determine which applications are suitable.

Of course, much of this rhetoric ignores the fact that the Canadian legislative and regulatory telecommunications framework is significantly distinct from that of the U.S. Canadian telecommunications legislation, as far back as the 1906 federal Railway Act which prohibited discrimination by “persons authorized to construct or operate a telegraph or telephone system or line”. The 1993 Telecommunications Act extends such prohibition to ISPs such as Rogers or Bell. The Act also prohibits a common carrier from controlling the content or influencing the meaning or purpose of traffic that it carries for the public. This statutory foundation does not exist in the U.S. context, leaving the FCC to address Comcast’s ITMPs on an ad hoc basis.

The Canadian ISP community argued that existing statutory general prohibitions are adequate to address each case on its facts and that imposing new net neutrality rules would unnecessarily restrict the scope for engineering and business judgment of each ISP in a dynamic competitive marketplace.

Google’s arguments before the CRTC must be seen alongside other pressing public policy issues. Privacy advocates are concerned about “Deep Packet Inspection” (DPI), which enables an ISP to target specific applications for “traffic throttling” purposes. The Canadian Privacy Commissioner has recently been seized with a complaint related to DPI in Canada. In the U.S., the FTC, Congress and the FCC are beginning to raise questions about the impact on privacy of practices such as DPI.

The current ITMP debate should be seen as one skirmish in the ongoing “clash of the titans” between Google and Facebook over the issue of “innovation by permission”: Google has accused Facebook as acting as a giant “walled garden”, similar to the way AOL acted in the 1990s (before itself was punished by evolving technology) and is urging legislators and regulators to ensure that Facebook adheres to the principle of “openness and transparency”. This debate brings into stark relief the potentially competing interests of network management and privacy: the Privacy Commissioner is concerned that Facebook is “not closed enough” from a privacy perspective! For a very interesting discussion with Fred Vogelstein (contributing editor of Wired magazine) about the competing interests of privacy and "openness" when thinking about Google vs. Facebook, check out a recent podcast of CBC's The Current.

Jonathan Zittrain also asks “are we in danger of too much openness?”. Zittrain is concerned that Google’s dogged pursuit of “openness” with applications such as its new operating system, Chrome, moves us further away from running code and storing our information on our own PCs toward doing everything online — in “the cloud”. Zittrain identifies the “most difficult challenge — both to grasp and to solve — of the [Internet] cloud is its effect on our freedom to innovate.”

All of this suggests that the potential for “undue preference” is in the “eye of the beholder”: it can occur at both the network level (Google’s concern for ISP ITMPs) and at the “application” level (as per Zittrain, freedom is at risk in the cloud, where the potential for gate keeping by Google and others arise “in ways that Bill Gates never dreamed of”).

To bring some order from all of this chaos, it would be arguably good public policy to formulate a list of anticipated unduly preferential circumstances in all platforms and in all contexts. The CRTC has previously shown that it is willing to put its mind to this question in earlier structural debates.

We certainly haven't seen the last of Google before the CRTC

Recently, the Quebec and Ontario governments announced changes to enhance certain tax credits aimed at the film and television industry with the goal of bringing more foreign based productions into these provinces. In doing so, both governments have recognized the increasing global competition to attract film and television productions with the use of government incentives.

Canada was already a pioneer in the development and implementation of government incentives when it introduced the current system of tax credits in 1997. The success of Canada's tax credit model in attracting film and television projects to the major production centers of Vancouver, Toronto and Montréal, did not go unnoticed. Similar incentives have since been introduced throughout Europe, Australia and the U.S. Presently, there are over 40 states in the U.S. which employ some form of government incentive program targeting the film and television production industry. This increasing competition and the rise in the Canadian dollar were cited as key factors in the recent Quebec and Ontario announcements.

It may then seem paradoxical that while the tax credit systems in Quebec and Ontario are being enhanced, some of their direct competition in the U.S. are coming under criticism for failing to live up to expectations. A recent article in the IEDC Economic Development Journal assesses incentives in certain states which seem to have significant flaws which detract from their overall value and efficacy.

While the tax credit systems already in place in Canada’s production centers are considered a cornerstone in the strategy to both feed the existing infrastructure, create high skilled sustainable jobs and continue to grow the existing film and television industry, in most U.S. states (with the exception of New York and California), incentives were introduced with the goal of creating both a film and television industry and a supporting infrastructure. Consequently, the experiences in these states have been markedly different than the experiences in places like Vancouver, Toronto and Montreal where such incentives are part of an overall strategy.

There was a tremendous growth in U.S. incentives starting at the beginning of this decade. Many state politicians seemed to fall under the spell of Hollywood, and notion that all that was required was an attractive incentive and the state would become, in the parlance of the film business, a “player”. As a result, incentives and film offices appeared all over the U.S. in places as disparate as Connecticut, New Mexico, Hawaii and Alaska.

The reality now coming into focus is that certain factors have resulted in these incentives being criticized as ineffective in achieving the goals of the lawmakers, and in many cases, resulting in a net loss for those states:

The absence of an existing infrastructure and some critical mass in the work force required states to permit the “importing” of many of the skilled jobs and suppliers, who then left the state once a production was completed. This mobility has made the establishment of a permanent infrastructure very difficult. Further, those individuals and suppliers who left the state offering the incentives, would pay income taxes to their home state and not the one offering the incentives.

Increased competition among jurisdictions has meant that many states allowed significant portions of a production’s budget to be spent outside of the state, thereby undermining one of the goals of the incentives and reducing the economic benefit to the state.

Many states adopted the use of transferable tax credits (as opposed to the type used in Canada) which could be sold by the production company (to the extent not required) to third parties who wanted a tax deduction. This unintended consequence added to the “cost” of such incentives as a result of the third party’s avoidance of tax.

The experience of states which have attempted to create an industry where nothing existed before, seems to support the position that incentives alone won’t achieve that goal. Whether U.S. state officials heed some of these concerns remains to be seen – but what is clear is that the lure of Hollywood extends beyond those who just want to be in the movies.

Well Google has been the subject of many Slaw comments, but it's on the legal side that it's hit the news recently.

It won an important decision before Justice Eady of the English High Court in which the court held that Google was not liable as a publisher of defamatory comments when comments made in an internet forum about Metropolitan International Schools, a British company that operates Internet-based training courses, surfaced in the top rankings of a Google search for the company. Of course now the Schools' highest hit is Eady's judgment.

"When a snippet is thrown up on the user's screen in response to his search, it points him in the direction of an entry somewhere on the Web that corresponds, to a greater or lesser extent, to the search terms he has typed in," Justice Eady observed. "It is for him to access or not, as he chooses."

As interesting as the judgment is how explicitly comparative it is, with the judge citing caselaw from around the world (Dutch decision in the District Court of Amsterdam on 26 April 2007: Jensen v Google Netherlands. Court of Appeal in Paris, 19 March 2009): SARL Publison System v SARL Google France Swiss decision of Subotic v Google Inc (in the First Instance Court in Geneva) and the Court of First Instance in Madrid on 13 May 2009: Palomo v Google Inc) and even Eastern European statutes – Bulgaria's Electronic Commerce Act of December 2006 and the Romanian law of Electronic Commerce (see Article 15 of Law No 365 of 7 June 2002).

The judge must have been googling.

In an American challenge, the Electronic Frontier Foundation, the American Civil Liberties Union and the Samuelson Law, Technology and Public Policy Clinic at the University of California, Berkeley, have raised concerns about Google Books in an Open Letter to Eric Schmidt. They want privacy designed into the architecture of Google's future.

They've asked Google to
limit the data it collects about users’ reading habits,
commit to protect reader records by handing them over only in response to subpoenas or court orders, and
put into effect measures giving users control of their data.

Protection Against Disclosure 1. Readers should be able to use Google books without worrying that the government or a third party is reading over their shoulder. Google needs to promise that it will protect reader records by responding only to properly-issued warrants from law enforcement and court orders from third parties, and to let readers know if anyone has demanded access to information about them.
Limited Tracking 2) : Just as readers can anonymously browse books in a library or bookstore, they should also be able to search, browse, and preview Google books without being forced to register or provide any personal information to Google. And for any of its
Google Book Search services, Google must not keep logging information longer than 30 days. Google should also not link any information it collects about reader use of Google Book Search to that reader’s usage of any other Google services without specific, affirmative consent.
3) Readers should have complete control of their purchases and purchasing data. Readers should be able to delete their records and have extensive permissions controls for their "bookshelves" or any other reading displays to prevent others from seeing their reading activities. Readers should be able to “give” books to anyone, including to themselves, without tracking. Google also should not reveal any information about Google book use to credit card processors or any other third parties.
4) Readers should know what information is being collected and maintained about them and when and why reader information has been disclosed. Google needs to develop a robust, enforceable privacy policy and publish the number and type of demands for reader information that are received on an annual basis.

Google has responded vigorously.

But as Michael Chabon, author of The Yiddish Policemen’s Union: A Novel, put it: "If there is no privacy of thought — which includes implicitly the right to read what one wants, without the approval, consent or knowledge of others — then there is no privacy, period."

Finally on the distant radar is the prospect of an antitrust suit. Christine Varney of DoJ reportedly has concerns about a Googleopoly, as Wired calls it. Here is Wired's take, along with a speculative take on what an antitrust suit might look like. Today's NYT reports pushback against Ms. Varney, and Google is confident in its Code of Conduct, and in the conduct of its code, but as Microsoft can attest, antitrust issues can be mighty distracting.

And the Calgary Herald asks "is Google good for Canada?"

and by Paul Chodirker

What was the number one selling album on Billboard’s top 200 chart at the end of January 2008? It wasn’t Radiohead’s In Rainbows, or Mary J. Blige’s Growing Pains. Can you guess what it was? It was a soundtrack album from “the little film that could” known as Juno.

If you’re not familiar with the Juno soundtrack, it’s basically made up of indie darlings and unknown musicians like Barry Louis Polisar and Kimya Dawson. Barry Louis Polisar is actually a musician who writes music for children. In fact, five soundtrack albums currently appear in the top 50 on the Billboard 200 charts.

So, before Juno came along to reinvigorate the industry, where did all the soundtracks go? To start, film producers and movie studios have paid far less attention to a film’s soundtrack since the world discovered how to download songs for free. In essence, people were creating their own soundtracks; whether they were based on a particular movie, or not. Thus, fewer soundtrack’s were sold and studios no longer saw soundtrack recordings as a valuable revenue stream. It was clear that the music world had indeed changed since the release of the Pulp Fiction soundtrack in 1994 (which sold more than 2 million copies worldwide). Now, Juno had come along to revive the popularity of the film soundtrack and studios couldn’t be happier.

Various media companies are now becoming increasingly interested in obtaining soundtrack album rights. On June 18, 2009, London-based First State Media Group, which already owns music publishers State One Music Group and S1 Songs, publicly announced that it would be prepared to contribute up to 5% of a film budget in exchange for control of the soundtrack. Under this particular arrangement, revenue from the film’s soundtrack would be split 50/50 between First State and the film producer after recoupment by First State of its advance.

The process for First State taking control of a soundtrack is simple — fill the soundtrack by using either its library of pre-existing songs, or employ one its own songwriters to compose the soundtrack. These music copyrights are registered with various copyright collectives who pay to the copyright owner public performance and mechanical royalties. Depending on the circumstances, there may also be other avenues of profit based on the exploitation of the music copyrights as they are embodied in a film. All of this has the potential of becoming a very lucrative revenue stream for the soundtrack owner.

Although State One could also release a soundtrack album for retail sale on CD and in digital download formats, it is more likely that the primary source of income will be generated by the public performance of the music.

One major issue with respect to a deal like the one being proposed by State One would be related to the creative choices by the film producer of the music for the film’s soundtrack. This, of course, could be addressed by the parties in the course of their deal making, but the flexibility required by film producers will always be a primary concern when a third party is providing or controlling the music for its productions.

This month's firm guest blogger is Heenan Blaikie's Media and Entertainment Practice. As always, you'll know our guest's posts by the banner we put at the top:

They've kindly provided Slaw with this introduction.

In a highly publicised decision that caught most music industry watchers off guard, a federal jury in Minneapolis last week handed the Recording Industry of America (RIAA) an unprecedented and overwhelming victory in the form of a $1.92 Million (U.S.) award against a mother of four for allegedly file-sharing 24 songs. At $80,000 per track, it represents a ratio of 80,000 to 1 of punitive damages to the actual damages suffered, assuming each song could have been legally purchased for $1.00. News reports on the case, the first of thousands filed in the U.S. against individual file sharers to actually make it so far along in the litigation process, suggest that such discrepancy could result in constitutional grounds for an appeal.

However the defendant, Ms. Thomas-Rasset, may want to think twice about that: the $1.92 Million (U.S.) judgment awarded against her is actually much higher than the award of $220,000 that the RIAA won in an initial trial. Yet the RIAA claims it’s not really about the money: a representative of the group suggested that the RIAA had offered to settle this case for between $3,000 and $5,000 “from day one”.

In response to the judgment, counsel to the Electronic Frontier Foundation suggested that the Jury wanted to punish the defendant for the downloading habits of millions of others, rather than for her own seemingly modest transgressions. The list of songs in issue includes such schlock rock favourites as Journey’s “Don’t Stop Believing” (which could well become the theme song of the music industry on this issue), Bryan Adams’ “Somebody”, and other “classics” by bands such as Destiny’s Child, Vanessa Williams, Janet Jackson and Gloria Estefan. Maybe the Jury wanted to punish Ms. Thomas-Rasset for her musical tastes as well.

So how might this have played out in Canada? The legality of file sharing has been hotly debated in this country for many years, and the issue boiled over again recently with the Canadian Recording Industry Association (CRIA) trading pot shots in the press with copyright luminaries like Michael Geist and Howard Knopf over both the legality of the practice and its effect on the recording industry. The best guidance available to Canadians on the issue comes from two cases, decided in 2004 and 2008 respectively, which still leave some uncertainty as to the legality of file sharing in Canada. What is clear, however, is that thus far CRIA has not had nearly the same success in the Canadian Courts that the RIAA has had in the U.S.

Under Canada’s Copyright Act, private copying of a musical recording for private use is expressly permitted. The trade off is the requirement for payment by consumers of a blank media levy, which levy is payable on blank CD-ROMs and other “audio recording media”. The blank media levy provisions of the Act were inserted at the behest of CRIA and others, who have since collected multi–millions of dollars in such levies.

The private copying exemption was inserted into the Act in the days of LPs, cassettes, 8 Tracks and reel to reel recording devices – long before the Internet and digital recording media made the process of copying a recording much simpler and faster, with no degradation in the quality of the original recording, no matter how many generations removed the copy is from the original.

In the 2004 case, in the course of suing individual alleged file sharers à la the RIAA, CRIA attempted to force various ISP’s to divulge certain information that would allow CRIA to determine the identity of the defendants. The Federal Court of Appeal held that CRIA could potentially obtain such information, and set out the guidelines it would have to follow if it wanted to be successful in such a request. However, the Court concluded that the method CRIA had chosen to achieve this in this instance ran afoul of the relevant privacy laws.

What was perhaps most notable about the decision were the obiter comments expressing doubt as to whether downloading was illegal in Canada. Interestingly, CRIA has not seen fit to follow the blueprint set out by the Federal Court and has not taken another case forward, perhaps because it is fearful of a negative result based on the Court’s obiter.

In the 2008 case, the Federal Court of Appeal overturned a decision of the Copyright Board of Canada to apply a blank media levy to digital devices such as iPods and other MP3 players on the basis that they were embedded memory devices and therefore did not fall within the definition of “audio recording media”. If the Court had decided that such a levy was lawful, that decision would have clearly legitimized the use of such devices for downloading musical recordings in Canada, and would have also meant many more millions in collected levies – which, of course, would have benefitted CRIA. The irony here was that CRIA fought against the application of the levy to MP3 players: presumably it feared that the potential lost revenues from legalized downloading would be far greater than the benefits from increased revenues generated by blank media levies.

The 2008 decision addressed embedded memory devices, but did not address external hard drives and other non-embedded memory devices. Such devices may in fact fit the definition of “audio recording media”, meaning that a levy may be payable and downloading onto such devices may be legal in Canada, if done for private use. Neither the 2004 nor 2008 cases have specifically addressed uploading of musical recordings. The legality of uploading a musical recording in Canada is questionable, particularly where there is clearly no private use attached to such act.

The Federal Government has tried in the recent past, without success, to pass legislation that will clarify some of the above issues. Its last attempt was criticized from a number of angles as being too music and entertainment industry friendly.

Assuming that liability in Canada could be established then in terms of damages for copyright infringement, the Act includes a civil remedy of statutory damages which a successful plaintiff may elect to be awarded in place of an accounting of profits or damages. Such statutory damages can be between $500 and $20,000 per infringed work, and are in addition to any punitive damages that a Court may decide to award. The amount of statutory damages to be awarded is to be based on, among other things, the need to deter other infringements of the copyright in question. The Court is also directed to reduce the award if the damages awarded are grossly out of proportion to the damage suffered.

So, musical tastes aside, a case similar to the Thomas-Rasset case in Canada would by no means have the same result. Even if CRIA were able to convince a Court to order an ISP to divulge the identity of the alleged file-sharer, and even if CRIA could prove to a Court that the defendant’s conduct in uploading or downloading the recordings in question was not within the private copying exemption, the total statutory damages that could be awarded to CRIA, if not grossly out of proportion to the damage suffered, could not exceed $20,000 per recording, for a total of $480,000 (Can.). Not a trifling amount to be sure, and if the Canadian Court decided to add punitive damages on top of that, a result not far off the Thomas-Rasset decision could arise.

Having said that, the likelihood of the music industry actually receiving payment of such monies from file-sharing defendants is pretty remote: as Ms. Thomas-Rasset rightly quipped, "You can't get blood from a turnip". Clearly, it is the publicity from such monumental awards that RIAA and CRIA really covet in their efforts to deter what they see as a serious threat to their livelihood. Whether such deterrence is actually achieved in the long run is anyone's guess. In any event, we may never get the chance to see a case like this in Canada: it appears that the RIAA is now changing its strategy in the U.S. to target ISPs rather than individual file sharers, and it seems reasonable to assume that CRIA will, again, follow suit.

The land title registration system in British Columbia, which is based on the principles of the Australian 'Torrens' registry system (named after Sir Robert Torrens) allows one to register title against real estate in a central registry. This system, which has been used since the 19th century, was a significant improvement from earlier, more cumbersome methods of proving title which required tracing back the historical “chain of title” in order to prove that the land was unencumbered.

A key part of BC’s land title system is the principal of “indefeasibility of title” which allows purchasers, lenders and other parties dealing with land to rely on the validity of title. A purchaser or mortgage lender is only required to review the current title to the lands to determine the name of the owner and a description of any mortgage, lease, easement, covenant or other interest that may affect title to the lands. Not only has this aspect of the system allowed mortgage lenders to process loans more quickly, but it has also allowed them to do so without the additional cost of title insurance.

At least, that was the practice until recently. This past April, the BC Court of Appeal cautioned that not all parties who rely upon a title may be treated equally: the Court suggested that the safeguards the system offers to bona fide purchasers may not be fully extended to mortgage lenders.

In Gill v. Bucholtz, BC’s highest court determined on the facts before them that a mortgage granted by a fraudster over a property that did not rightfully belong to him was not an effective charge against the property, and as such the mortgage lender was unsecured and out of luck.

The Gill case involved real estate fraud perpetrated against Mr. Gill, the registered owner of the property. An unknown fraudster forged the signature of Mr. Gill and transferred the property to a female accomplice named Mrs. Gill. Once Mrs. Gill became the registered owner, she applied for a loan and granted a mortgage over the property in favour of the lenders, Mr. and Mrs. Bucholtz. The lenders verified the identity of Mrs. Gill, completed a title search through the Land Title Office, and registered the mortgage against the property before advancing $40,000 to Mrs. Gill.

Soon after this, Mrs. Gill granted a second mortgage in favour of another private lender. In this case, the lenders advanced funds ($55,000) before registering the mortgage in the Land Title Office, and Mr. Gill, who had learned of the fraud, filed a caveat which prevented the second mortgage from being fully registered. The fraudsters then disappeared with the proceeds of the loans.

It was clear that Mr. Gill would be entitled to have his property returned to him because section 23 of the Land Title Act (the "LTA") provides that the registered owner’s title to property is “indefeasible” subject to certain exceptions including the right of a person deprived of land to show the registered owner participated in fraud. Therefore, Mr. Gill’s claim to the property was not defeated by the fraudulent transfer to Mrs. Gill.

It was less clear whether the lenders still had valid charges on Mr. Gill’s property. If the mortgages were valid, then Mr. Gill’s property would be returned to him encumbered by the two new mortgages. In that case Mr. Gill could be compensated through the Land Title Assurance Fund (funded by taxpayer money). If the mortgages were invalid, then Mr. Gill would get his property back free of the two mortgages and the lenders who relied upon the validity of title would be left without any security for the funds they advanced to Mrs. Gill.

The BC Court of Appeal decided against the lenders and found that although the LTA protects the genuine owner or purchaser of property who is relying on the register in respect of title to the property, it does not protect someone who has a lesser interest in the land such as a registered mortgage. The court concluded that the plain meaning of section 23 of the LTA reveals that mortgage lenders do not obtain the same protection of “indefeasibility” upon registration of their mortgage.

Following Gill, in order to mitigate the risk of title fraud, lenders should evaluate their internal procedures and due diligence protocols to ensure that a person claiming to own property did not obtain their title fraudulently. Extra care should be taken where the property was recently acquired by the borrower. If the property was recently acquired, the lender (or their solicitors) should review the transaction in which the borrower acquired title to the property and request copies of the purchase and sale documents (e.g. purchase agreement, statement of adjustments, appraisal, agency agreement). Lenders might also consider requiring title insurance to help protect against fraud.

It is possible that in the future, the LTA may be amended in order to extend protection to all parties that have an interest in land and who may rely on BC’s land title system. But until this happens, the onus is now on the lenders to take steps to protect themselves.

Recently, I ran across an excellent article in the Spring 2009 issue of Corporate Governance Quarterly called “Climate Change Disclosure Heats Up”. The authors, Patricia Koval, Tyson Dyck and Michael Pickersgill of Torys LLP, discuss public companies’ disclosures pertaining to the companies’ exposure to “climate risks”. This broad risk category includes matters such as: how climate change affects the company’s profitability, what opportunities / challenges climate change presents to the company, and what actions the company is taking in anticipation of the various climate change related regulations coming down the pipe (e.g. the anticipated mandatory cap-and-trade system on greenhouse gas emissions).

The article contains a good review of Canadian disclosure requirements, and in particular the challenges created by the general requirement contained in National Instrument -51-102 Continuous Disclosure Obligations that requires issuers to disclose in their Management Discussion and Analysis filings (to borrow the paraphrasing from the article) “any known trends, demands, commitments, events or uncertainties that are reasonably likely to affect the issuer’s business or that management reasonably believes will materially affect the issuer’s future performance”. This obligation would likely impose a need to discuss the financial and operational impacts of environmental protection and climate change legislation on the issuer’s business, which may include such things as the recent legislation and proposed legislation in B.C. (see a summary of climate change legislation here), Ontario (see, for example the proposed Environmental Protection Amendment Act) and in the U.S. (see, for example the draft American Clean Energy and Security Act colloquially known as Waxman-Markey) all, therefore, need to be taken to account.

Of course, many of these “climate risks” are highly speculative: the precise impact of climate change on any one geographic area or even one country is unknown. Such speculation could likely include not just an analysis of the environmental changes, but their impact on local regulations and the worldwide geopolitical scene (i.e. political risks, international conflicts, the continued free flow of goods, etc.).

In this light, one may try to dismiss this concern about “climate risks” as nothing more than a bunch of hot air, since statements about “climate risks” are necessarily forward looking statements, and under the National Instrument forward looking statements must have “a reasonable basis”. How reasonable is it to take into consideration a worldwide phenomenon who’s impact is very difficult to quantify not only in time but also in geographical location?

Nonetheless, insofar as securities law disclosure requirements are concerned, it is clear that there is a reasonable basis to conclude that this newfound “climate consciousness” (for lack of a better phrase) is likely to affect an issuer’s future performance in many ways. As just one simple example, if a business is a significant greenhouse gas emitter, under cap and trade, it will be beneficial to reduce emissions. Any plan to reduce emissions by, say, 5% will (a) require concerted action from the management of the company to establish the company’s baseline emissions, (b) require an outlay up front to finance initiatives and new technologies that will reduce emissions and (c) will likely result in greater efficiencies and therefore impact future operating expenses. In addition, taking concerted action in response to climate change will likely achieve a certain degree of brand lift and will help establish the green bona fides that are becoming increasingly necessary in certain industries to maintain clients and win new business.

In the end, while some still argue over the potential impact (and even the very existence) of climate change, what is clear is that governments, investors and customers have become engaged and are taking action. If for no other reason, therefore, all manner of enterprises must be responsive and plan for the inevitable changes in the marketplace and in government regulation.

Requirements aside, in my view, issuers will benefit not only from taking action but also publicizing what they are doing in response to “climate risks” relevant to their business: ultimately these risks are front of mind not only for governments and their investors but also for their current and potential customers. So while the impact of climate change on any one business may be uncertain, what is certain is that businesses should be concerned about the challenges posed by the reaction of governments and the marketplace to climate risks.

It should be no surprise that, with the current market conditions, both developers and purchasers are closely scrutinizing just how firm their contracts are for residential property developments currently under construction. As such, the recent British Columbia Supreme Court decision in Dwane v. Bastion Coast Homes Ltd. drew a lot of attention from developers, pre-sale purchasers, and the media alike in this Province. Though headlines blared Judge lets buyer ditch deal on condo and B.C. court rules pre-sale condo contract invalid, the fact of the matter is that Bastion Coast is little more than the application of pre-existing law.

In Bastion Coast, the issue at hand was whether the provisions of B.C.’s Real Estate Development Marketing Act (“REDMA”) gave Dwane the right to get out of the purchase agreement he entered into for a 2,000 sq. ft. condo unit in Vancouver.

Dwane claimed that certain representations had been made to him with respect to the view and privacy of his development unit at the time he entered into his purchase agreement. Once he had actually seen the constructed unit at a later point in time, Dwane claimed the view wasn’t as good as was allegedly promised, nor was the privacy of the unit what he anticipated. Dwane wanted an out from his agreement.

At the time Dwane entered into his purchase agreement in May 2008, a disclosure statement relating to the development had been prepared, together with three amendments to that disclosure statement. The amendments dealt with issues including an increase in the number of units in the development, the removal of a wine storage room from units, an increase in the budgeted costs for the development, and the reconfiguration of units. Of the four key documents in existence at the time Dwane entered into his purchase agreement—namely, the disclosure statement and three amendments—Dwane did not receive two of the amendments either before or at the time he entered into his purchase agreement.

The court found that, in accordance with s. 15 and s. 21(3) of REDMA, Dwane did have a right to walk from his purchase agreement because the existing amendments to the disclosure statement were not given to him at the time he entered into his purchase agreement. In making its decision, the court specifically noted that REDMA is intended to be consumer protection legislation, meant to make sure purchasers are aware of material facts about the developments being marketed to them. In this light, the result was rather unsurprising: Bastion failed to disclose all of the material documents in its possession, so Dwane was entitled to walk.

The key message developers should take from the case is that if they are about to enter into a purchase agreement with a purchaser, they should make sure they have provided that purchaser with the disclosure statement for the development, and any amendments to this disclosure statement. The best way for developers to avoid claims like Dwane’s is to get something in writing from the purchaser acknowledging the purchaser has received all of these documents.

While some developers may be taking this case to mean that they should avoid preparing amendments to disclosure statements, in order to prevent purchasers from making arguments like Dwane’s, the case actually stands for the opposite. If developers don’t prepare an amendment to their disclosure statement when a material fact relating to the development has become false, misleading or has been omitted, then purchasers may be able to use that lack of proper disclosure as an out from their agreements, leaving the developer holding the bag.

On June 22, 2009, Canada’s federal government announced that a team led by the chair of the B.C. Securities Commission, Doug Hyndman, will lead the transition to a new national securities regulator. Mr. Hyndman will be responsible for negotiating with the provinces—each of which currently has its own securities regulator—as well as developing the legislation that outlines the new national regulator's mandate. A report is due in a year, with an implementation target of three years.

Goodness knows, this is long overdue. In the absence of a single national securities regulator, efforts have been underway for many years to harmonize capital raising regulation among provinces. These efforts have made some progress, but it is still unclear why there are substantial differences among provinces for regulations that one would reasonably expect to be uniform.

For example, exemptions from the prospectus requirements are enumerated in Canadian Securities Administrators’ National Instrument 45-106 [PDF] (“NI 45-106”). One might expect that the same types of protections that are applied to potential investors in say, Saskatchewan, should be equally applied to potential investors in New Brunswick. Aren’t all the potential investors in those provinces entitled to similar types of safeguards? Under the current regime, apparently not.

NI 45-106 provides that in British Columbia, New Brunswick, Nova Scotia and Newfoundland and Labrador, an issuer can issue securities to an investor if the issuer delivers an offering memorandum before the investor signs an agreement to purchase. Yet in Alberta, Manitoba, Northwest Territories, Nunavut, Prince Edward Island, Québec and Saskatchewan, this exemption is only available if the maximum investment is under $10,000. And in Ontario, this exemption is not available at all. How are these differences justifiable?

Take another example: while in most provinces securities can be issued to friends, family and business associates of an issuer and its directors, that exemption from prospectus requirements does not exist in the same form under the laws of Canada’s most populous province, Ontario.

These are just two of the differences in capital raising rules among provinces. One would think from all this diversity that regulators in various provinces consider their residents in need of different securities protection than residents of other provinces. But do they? Hardly. The differences make no sense.

For that matter, if we’re going to do away with provincially-based distinctions, why stop there? Why not look at national borders as well? In Canada, securities can be issued under NI 45-106 to “accredited investors”. One criterion for an individual to qualify as an accredited investor is that the person has $1,000,000 in financial assets (i.e. stocks or bonds; owning an apartment block does not count). The term “accredited investor” came from regulation in the United States, as did most of the qualifications to be considered one. However, the United States’ definition of “accredited investor” includes a person who has $1,000,000 in assets, not strictly “financial” assets. (Vive la petite différence!) As such, the word “financial” in NI 45-106 probably precludes tens of thousands of Canadians who would qualify as “accredited” if they lived in the United States. How is this distinction justified?

Let’s bring uniformity and reason to the capital raising process. Sophisticated people should be able to invest where and when they feel it right, as should wealthy people and certain others who have sufficient knowledge of the players, the project, or the industry. Whether the investor resides in Korea or Belgium, capital should flow from investors who want to invest in a project or company to the projects or companies that need capital. Standard prospectus and registration exemptions, carefully drafted under an international general agreement on securities regulation, would help the free flow of capital in the same way that GATT helps the free flow of goods. And they’re long overdue.

Neither civil libertarians nor privacy advocates are likely to be pleased with the two Bills introduced last week by Canada’s federal government, Bills which are intended to give police wider powers to access online data without a warrant. If passed, the Technical Assistance for Law Enforcement in the 21st Century Act (Bill C-47) will require Internet Service Providers (ISP’s) and other "telecommunications service providers" to install equipment facilitating the interception of communications, and to allow police access, without a warrant, to the personal information of users including names, addresses, telephone numbers, email addresses and internet protocol addresses. The Investigative Powers for the 21st Century Act (Bill C-46) ensures police can obtain warrants for current and historical transmission data, but also allows police to remotely activate existing tracking devices on cellphones and cars.

Most members of the public will not take issue with attempts to control terrorist and criminal activities. As privacy advocates well know, since 9/11 individuals have been all too ready to give up privacy rights in exchange for a promise of greater security, and perhaps the new legislation can be at least partially explained on that basis. However, what is troubling about the proposed legislation, particularly for civil libertarians, is the potential for surveillance in the absence of a warrant. The government press release issued in conjunction with the Investigative Powers for the 21st Century Act justifies the legislation on the basis that other countries including the United States, Australia, New Zealand, Germany and Sweden already have similar lawful access legislation. The press release issued in conjunction with the Technical Assistance for Law Enforcement in the 21st Century Act insists that the Act will not provide law enforcement with any new interception powers. 

Section 16 of the Technical Assistance for Law Enforcement in the 21st Century Act provides that the Commissioner of the Royal Canadian Mounted Police, the Director of the Canadian Security Intelligence Service and the head of a police service constituted under the laws of a province may designate a limited number of persons who may request particular personal information from a telecommunications service provider. In some respects this power is similar to section 7(3)(c.1) of the Personal Information Protection and Electronic Documents Act (PIPEDA), legislation which applies to private organizations in the federal sphere, which permits the disclosure of personal information collected by an organization without an individual's consent if a "government institution" (which presumably includes police) requests that the information be disclosed. However, under section 7(3)(c.1) of PIPEDA, the government institution must identify its lawful authority to obtain the information, and the request must be made for the purpose of enforcing a law, carrying out an investigation or gathering intelligence. In contrast, section 16 of the Technical Assistance for Law Enforcement in the 21st Century Act contains no similar limitation: the designated person need only request the information.

Whether or not the claims in the press release are accurate, in Canada the issue will ultimately come down to whether the legislation, once passed, can withstand a constitutional challenge. Arguably, if the power given to police to obtain personal information without a warrant or judicial oversight is contrary to section 8 of the Canadian Charter of Rights and Freedoms, which guarantees that everyone has the right to be secure against unreasonable search or seizure. 

Additionally, ISPs could be facing a significant cost to install the monitoring technology that is now required. According to one of the government press releases, in order to partially alleviate potential hardship, smaller ISPs will be given a longer period in which to comply with the law – an aspect of the legislation that highlights its ultimate weakness. If smaller ISPs need not comply immediately, the criminal element the legislation is supposedly directed at will simply move their activities to these ISPs, at least in the short term, a possibility raised in a Globe and Mail article. But more importantly, that same criminal element will no doubt resort to more sophisticated encryption and other means to avoid detection. The ultimate result may not be greater scrutiny of criminal activities, but simply the development of a more sophisticated criminal element, at the expense of individual rights.

The legislation is being introduced by a minority government, but there may very well be sufficient support from Members of Parliament to ensure its passage, given that the Liberals, now the Official Opposition, introduced similar legislation in 2005. Additionally, the new legislation was introduced just prior to Parliament’s summer recess, a tactic that may be intended to keep it out of the spotlight. However, such a tactic can also lead to a building of public opposition, similar to what occurred when unpopular amendments to the Copyright Act were introduced in 2008.

Public concern regarding the proposed access legislation appears to be growing: Michael Geist’s article on the legislation had 75 responses at last count. It will be interesting to see what stakeholders and advocacy groups come forward over the summer with well articulated concerns. The government clearly has law enforcement on side, which has apparently been advocating access legislation for quite some time. So far, the CBC noted concerns expressed by the Canadian Assocation of Internet Service Providers regarding potential costs. However, civil liberty advocates and privacy groups have yet to weigh in. Hopefully Canadians will not be so distracted by the late arrival of summer that they ignore this important debate.

I'm a big believer in the idea of a solar panel on every rooftop. It just makes sense to me. I would also like to experience an electric car traffic jam, and to have the power of the ocean used to light my home. Some may say I live in a dream world. Maybe now I do, but our world is changing—and in British Columbia my dream has a chance to become reality, thanks to the provincial government's commitment to renewable energy. 

Premier Gordon Campbell proclaimed on April 23, 2009 that "We are going to be the alternative energy powerhouse in North America. We are going to be the example." With the recent policy shift towards the green and the development of a first class renewable energy industry, I have no doubt that the Premier will achieve his goals and the Province will be a leader in the fight against the effects of climate change.

How is this possible? First and foremost, the BC Government's 2007 Energy Plan calls for the Province to be energy self-sufficient by 2016. BC Hydro, a crown corporation and the principle electricity provider in the Province, has been a net importer of electricity for 7 of the last 10 years. In this context, self-sufficiency is both a significant and an aggressive goal. In an effort to meet that goal, BC Hydro heavily promotes conservation, and is looking to the private sector to build new renewable energy projects.

Second, in June, 2008, BC Hydro released the 2008 Clean Call for Power, which was an RFP for 5,000 gigawatt hours of new electricity—enough electricity to power 500,000 homes, all of which must come from clean and renewable sources. The local industry met the challenge bidding a total of 17,000 gigawatt hours to the Call. Proposed projects include:

• 45 run-of-river (low impact hydro) projects
• 19 wind (including Canada's first offshore wind farm)
• 2 waste heat projects
• 1 biogas project
• 1 biomass (wood waste)

Results of the RFP are expected some time this summer.

Finally, in addition to the Energy Plan and the Clean Call for Power, the government has also embarked on a whole slew of climate change related legislation—some which received international attention (our Carbon Tax) and some is still sitting on the sidelines (Cap and Trade).

In my view, it is a very good thing the Canadian Provinces are taking the initiative to fight climate change (in addition to BC, Ontario and Quebec are some other good examples that I am aware of), as the Government of Canada has been extremely slow in passing any significant climate change related legislation. At present, Canada seems “tunnel-visioned” into funding research for carbon capture and storage (CCS), which would serve only to perpetuate the carbon problem doing nothing to reduce greenhouse gas emissions. Here's a thought: instead of focussing on burying millions of tons of emitted carbon, how about retiring old coal fired plants and replacing them with renewable energy, and using the billions of R&D dollars for CCS to support clean and green renewable energy projects across the country?

British Columbia is blessed with an incredible natural endowment which can fuel thousands of megawatts of electricity from renewable sources. It is also very fortunate to located within a reasonable range of a tremendous electricity consumer—the great state of California. With coastlines ready for tapping wave and tidal power, rivers flowing eager to spin their turbines, and hot rock begging for a drink of water to turn into steam, BC is about to become a renewable energy powerhouse and a leader in the fight against climate change.

The world wide economic downturn is prompting companies to sell non-core business units, consolidate operations and generally downsize. Lately, everyone seems to have at least one article devoted to some aspect of restructuring a business—see, for example, the cover story in the June 2009 edition of LEXPERT magazine.

Despite the fact that restructuring initiatives often have a profound impact on employees, few articles are talking about the human resources implications of restructuring a business. Employees have valuable know-how, technical knowledge, and relationships with customers, so their departure or disaffection can have significant and unintended financial consequences for a company.

CNET recently reported the results of a survey of 950 people who had lost or left their jobs during the past 12 months. Nearly 60% of admitted to taking confidential company information with them, and of those, 60% reported having an unfavourable view of their former employer. Similar losses also occur in businesses that have undergone restructuring or which have been purchased by new owners. In an article in the April 2007 Harvard Business Review, David Harding and Ted Rouse argued that unless purchasers of businesses make efforts to understand employee needs and the culture of the purchased business, they will lose valuable employees, employee productivity, customers, and market share after closing. Though it predates the current economic downturn, the piece (locked behind a paywall but available for purchase here) is even more relevant today.

Planning for a business restructuring often takes months; yet in my experience, insufficient resources are typically devoted to managing the human resources consequences, leading to significant additional or ‘hidden’ costs. The following are some examples of strategies that can mitigate costs and losses associated with terminated or disaffected employees:

• Rumours of a pending sale of a business or layoffs are worrisome and distracting to employees, resulting in lost productivity, higher benefit costs, poorer client relations and service, and attrition of key employees. Emphasize the importance of taking steps to maintain confidentiality throughout the planning or negotiating stages.

• How fairly employees believe they and laid off co-workers were treated during the restructuring will affect retained employees’ commitment and productivity. Consider what if any steps you can take to minimize the chances that employees will become disaffected and/or leave as a result of the restructuring.

• If you are considering providing ‘working notice’ of termination for employees, consider the hidden costs of such a plan including increased benefit claims and costs, the potential negative impact on service to clients and customers during the working notice period, and the risk that those employees will not complete critical tasks or facilitate a transition prior to their termination. Offering a closing bonus or increased severance offer payable at the end of the working notice period dependent upon maintaining service levels or completion of the key tasks, is one way to manage those risks.

• If the sale or closure of a business or business unit is delayed, do not expect that an extension of employees’ working notice will be welcomed by those employees. One consequence of that event is that any negotiations for the final severance packages, if not yet settled, will be negatively affected. If it is reasonably foreseeable that the sale or closure date may be delayed, consider the benefits of agreeing to more generous severance package terms in exchange for an early settlement coupled with a right for the employer to later apportion what part of the severance will consist of working notice and pay in lieu of notice.

• Business owners who have agreed to sell their business but stay on as an employee after the closing are usually not prepared for and/or underestimate the difficulties associated with the change in control and culture that inevitably occurs. Ensure that any new employment agreements have good severance provisions that can be triggered by the former owner/now employee, and minimize any linkages to payment of the sale proceeds with the length of employment, post-closing.

• If retention of key employees is a condition of sale, determine what is necessary to secure their employment, or continued employment. Key employees’ leverage increases as costs to negotiate and implement the sale have been incurred, and as closing nears. Consider the relative risks of early communication of a sale that may not close in order to secure key employees, versus the costs of not securing key employees early.

• Consider the culture of an acquired business when imposing new employment contracts. Even when a purchaser agrees to offer employment to current employees on substantially the same terms, if the form of employment contract (i.e. formality, tone, or one-sided language) is at odds with what the employees are used to, the employee-purchaser relationship will get off to a bad start. That in turn may affect the employees’ willingness to buy into or adapt to operational changes implemented by the purchaser, or result in loss of productivity or other costs associated with attrition.

By taking care in the early planning stages, one can minimize the unintended financial consequences associated with restructuring a business. It is inevitable that these events will be stressful to employees, however by considering the impact on employees in advance, it is possible to have a successful—if not happy—ending.

Having spent two of the last three weekends in Las Vegas and San Francisco, I got to thinking about cross-border legal issues. I know that’s pathetic, but bear with me.

British Columbia is one of several provinces with reciprocating jurisdictions in the US for the enforcement of judgments. (In BC, this arises pursuant to Part II of the Court Order Enforcement Act, RSBC 1996, c.78). Rather than commence a new action on the foreign judgment, a judgment from a reciprocating jurisdiction can be registered in BC, and it becomes enforceable as if it was a BC judgment. This is a valuable tool for judgment enforcement as the judgment debtor is only allowed to raise a few defences to the registration of the judgment.

For many years BC practitioners have gone merrily along under the notion that a judgment granted in a non-reciprocating US jurisdiction could be registered in a reciprocating US jurisdiction (since all US jurisdictions, like all provinces with the exception of Quebec, reciprocate with one another) and then the judgment could be registered in BC. Simple, easy, no fuss. This practice was recognized in a 1996 BC Supreme Court decision Hickman v. Kaiser as a “jurisdictional convenience”. In that case, a judgment from Texas (non-reciprocating) was registered in Idaho (reciprocating) and then registered in BC. The underlying rationale at play there, was, I think, that if the original judgment can be registered in a reciprocating state, why should a BC court to look behind that registration?

All was well for those of us who seek to enforce foreign judgments, until a 2008 decision of the BC Court of Appeal. In Owen v. Rocketinfo Inc. a judgment from Nevada (non-reciprocating) was registered in California (reciprocating) and then registered in BC. The Court held that Hickman was not determinative of the issue, so it did not need to expressly overrule the decision. I can tell you that this comes as something of a surprise to those of us who practise in the area because we all gave our clients advice about enforcing judgments based on the decision in Hickman.

The Court looked at the definition of the word “judgment” in s.28 of the Act and decided that since the reciprocating jurisdiction (in this case, California) was not the “original court”, then, the judgment from California could not be registered in BC. The rationale became, essentially, that you shouldn’t be able to do through the back door what you can’t do through the front door.

While that might give the decision some surface appeal, this seems to me to be an overly technical approach to the situation. We hear and read long soliloquies from the courts about mutual respect, deference to each other’s decisions and judicial comity. There are more and more cross-border transactions so this issue is bound to come up with increasing frequency. The Court of Appeal had a chance to demonstrate real and effective judicial comity and recognize the validity and easy enforceability of the California judgment — and it wasted that opportunity.

Is this the beginning of a new era of judicial protectionism where the enforcement of decisions of courts of competent jurisdiction become bogged down in needless procedural wrangling? With access to justice and the costs of litigation being political hot-button issues, one can only hope the Court of Appeal will not continue much further down this path.

Surprise, surprise. Canada, with its stable equity market and a sound economic policy framework, was able to withstand some of the global credit market issues and moved to first place in the Milken Institute’s 2008 Capital Access Index.

The Index looks at such factors as macroeconomic environments, financial and banking institutions, the development of the equity and bond markets, and alternative capital sources. Because a firm's access to capital allows it to implement innovative ideas and contribute to technological advancement, job creation and quality of life, the index is a tool for measuring how countries can act to reduce more fully their lending barriers. There are 122 countries ranked in the index, based on the availability of accurate and adequate data.

What does this mean on a practical level? To me it means that companies worldwide looking to access capital should start by contacting Canadian brokers, banks, venture capitalists and professionals who have access to those targets. The companies don’t need a pre-existing Canadian aspect to them: that aspect can be created, such as a listing on a Canadian stock exchange. This was made evident, when, for example, a Chinese construction company listed on the TSX Venture Exchange in a $60 million transaction and raised much need expansion capital at the very bottom of the stock market, in early March 2009.

The Capital Access Index ranks countries around the world in terms of the financial infrastructures that support entrepreneurial activity by providing access to capital. The index is unique in the breadth of economic factors and financial instruments that are analyzed and its reliance on quantitative, not qualitative, data.

The Capital Access Index top 10 markets in 2008 (with 2007 rankings) are:

1. Canada (4)
2. 
Hong Kong SAR (1)
3. 
Switzerland (7)
4. United Kingdom (2)
5. 
Singapore (4)
6. 
United States (11)
7. Netherlands (15)
8. Norway (9)
9. 
Australia (8)
10. 
Finland (9)

The credit and mortgage market turmoil created a drag on bond markets, which impacted the rankings of many markets. Canada took first place from Hong Kong, which had dominated the Index in prior years.

Get ready for our second firm guest blogger here on Slaw. Starting Monday, you'll be treated to a week's worth of wisdom from the west coast, thanks to our guests from Clark Wilson LLP.

As BC's Law Firm for Business, Clark Wilson LLP provides effective and practical legal advice on commercial issues affecting the business community. This week's Slaw contributors will share their perspectives on a range of topics relevant to their respective practice areas including securities, intellectual property, corporate finance, insurance, real estate, employment, and renewable energy.

You'll know that a post is from our guests because you'll see this banner at the top of their entries:

Enjoy the posts from Clark Wilson and engage the writers with your comments. They're looking forward to it.

Last September, Melanie Bueckert, Legal Research Counsel at the Manitoba Court of Appeal, (and occasional Slaw contributor), saw a reference to the Head-Start Program offered by the Edmonton Law Libraries Association (ELLA). As a law librarian in a small market, I was both aware and envious of the program and the association that presented it. While I fantasized about the possibility of offering a similar program here in Winnipeg, Melanie took a bolder step and asked if it were possible to put on a similar program here, by collaborating with law librarians. Since Melanie was also co-chair of the Manitoba Bar Association’s Legal Research Section (with Darla Rettie, a colleague of my firm), all of a sudden the program went from a fantasy to a possibility.

We arranged a meeting between Darla, Melanie, and several Winnipeg law firm and government library staff to determine if there was a need for the program, and if so, how would we do it. As trainers of articling and summer students, and junior associates, we’re well aware of the need for legal research training that takes into account the practical realities of a law firm or the Department of Justice. It didn’t take long to strike a committee, as well as to connect with Eileen Derksen Mead of the Law Society of Manitoba as an additional partner. She was the catalyst to make this come true, by taking on overall administration and organization as well providing inspiration.

Shaunna Mireau (another Slaw contributor) very kindly forwarded to us copies of ELLA’s planning documents, which we used as a template. Our program will run one day, and while it is targeted at articling students, we will open it up to other lawyers who would like a refresher in legal research, or who are new calls to Manitoba, as numbers warrant.

The core committee consisted of Eileen Derksen Mead, Program Counsel – Continuing Education and Competence at the Law Society, Melanie Bueckert and Darla Rettie, and Jodi Turner of Justice Canada, Emma Wood of Tapper Cuddy LLP, Garth Niven of the Great Library, and me. Jodi had participated in the ELLA program several years ago, so she brought that practical experience to the table.

We knew this had to be a hands-on program. These students had just gone through three years of law school lectures, and now they needed to “do” the law. After much brainstorming over lunches provided by the Law Society (thank you very much!), we developed a format that would cover all the branches of legal research in one day – from the research interview all the way through to writing the memo. With a maximum registration of 60, students would be divided into four groups. The whole group would get the problem, and then break out into sessions covering commentary, case law, forms and precedents, and legislation. I don’t want to give too much more away, except to say that Darla created a query that covers all of these situations and could very well have come from her own practice.

The lawyers on the committee recruited expert colleagues for the presentations, and paired them with Emma and me (Melanie once compared this to the “one of us, one of them” practice of the tv show Heroes). Taking into account that a number of firms don’t have library staff, we included a tour of the Great Library and meeting with the staff there (Garth, Ron Rennie and Wilf Scharbach). This will be the legislation section of the program, led by Jodi.

Of course, I had ulterior motives for participating in this project. There are very few private law firm librarians or library technicians in Winnipeg. Part of it is because there aren't that many firms large enough to support a private library. I knew this would be an amazing opportunity to showcase our profession to a new generation of lawyers and enhance our individual reputations within our own firms or government departments.

We’re finalizing the presentations and the materials now. Registration has been open for a month, and we’re over halfway to our maximum, with a waiting list of summer students who would like to be included. When Melanie first approached me about this program, I was skeptical about pulling it off. I wanted it to work, but I wasn’t sure I was ready to put in the work involved in making it happen. I'd underestimated the power of a team. Now I can hardly wait for bootcamp, legal research style!

(Cross-posted to Library technician dialog)