Published by the Technology, Intellectual Property and Communications Group
McCarthy Tétrault FRANÇAIS VOL.6,
Technology Law Quarterly

Letter from the Editors
We highlight some of the important developments that occurred in the last quarter and their implications for tech companies.


Canada Issues New Guidance on Encryption Controls
The Export Controls Division of Foreign Affairs and International Trade Canada recently released new information on its policies regarding the application for and granting of permits for the export or transfer of information security goods, software and technology. Canada imposes controls on transfers of these items to all countries other than the United States.

UK IAB Retracts Code of Practice for Online Behavioural Advertisements
The UK’s Interactive Advertising Bureau (IAB) recently issued and then retracted its Code of Practice for Online Behavioural Advertisements, which was intended to provide guidelines to Internet marketers on the use of cookies for tracking and analyzing the browsing habits of website visitors.

Technology Contracting

Risks of Cloud Computing — Part I
With the next big wave in IT — so-called "cloud computing" — starting to hit the shores of the corporate world, now is a good time to begin to grasp what cloud computing entails and how to manage the legal risks it kicks up.

Managing Subcontracting Risk
When outsourcing to IT service providers, customers should be aware of the risks posed by their suppliers’ use of subcontractors and take steps to manage those risks. In this article, we discuss ways that customers can better protect themselves, including approving upfront the subcontractors to be used and contractually requiring the supplier to obtain the customer’s consent to any subcontracting.

Sanctions, Restrictions and Corporate Immigration — Upcoming Changes to the Temporary Foreign Worker Program
Changes to the Temporary Foreign Worker Program, including hard caps on the length of time temporary foreign workers can stay in Canada and new sanctions against employers who fail to comply with their commitments to temporary foreign workers, are slated to take effect on April 1, 2011. Companies would be well advised to prepare for the changes now, starting with conducting an immigration audit of their existing workforce in Canada.

Technology Finance

Taking Your Company Public — Part III
In the last two issues, we outlined why some private entrepreneurial businesses go public — and why many do not. If you have worked through the pros and cons of becoming a public company, and you do want to sell shares in the public market, we now turn to the process of the initial public offering (or IPO, as it is colloquially known).

Intellectual Property — Copyright

Federal Court of Appeal Dismisses Tariff 22.A Judicial Review Applications
In a decision impacting Internet Service Providers, online music services and copyright owners, the Federal Court of Appeal has held that a download of a music file from an online music service to a single user is a communication of the musical work to the public under the Copyright Act. As a result of the decision, the Court of Appeal has confirmed that music downloads are now subject to both "reproduction" tariff administered by the collective society CSI and "communication to the public" tariff administered by the collective society SOCAN.

Federal Court of Appeal Upholds Educational Tariff Certified by Copyright Board
The Federal Court of Appeal recently released an important decision on the subject of fair dealing in the K-12 educational sector. It upheld the Copyright Board’s ruling that teachers’ copying of textbooks and other copyright materials for classroom use does not qualify under the fair-dealing exception for private study. The decision means that educators are liable for copyright royalties when they make multiple copies of copyright works for use in Canadian classrooms, as such dealings are not "fair" in the meaning of the Copyright Act.

When Do Broadcasters Reproduce Works? The Copyright Board Clarifies the Law in the Commercial Radio Tariff Case
The Copyright Board recently released its reasons in the Commercial Radio Tariff case, making a number of important statements about what constitutes a "reproduction" for the purposes of the Copyright Act. In particular, the Board canvassed the activities of broadcasters and examined which activities resulted in reproductions of musical works (and sound recordings) in the course of their broadcasting operations.

Intellectual Property — Patents

With "One-Click," Business Methods Are Patentable in Canada
In a decision of the Federal Court of Canada released on October 14, 2010,, Inc. v. Canada (AG), the court allowed an appeal from a ruling by the Commissioner of Patents that had originally denied a patent application by Inc. for its pervasively successful one-click online ordering technology. The Commissioner had held that the subject matter of Amazon’s application did not qualify as patent-eligible subject matter under the Patent Act. In overturning this finding, the court instead held that the Commissioner had applied wrong legal tests in rejecting Amazon’s patent application, and articulated a new test that does not preclude computer-implemented innovations and business methods from being patented in Canada if they are directed to subject matter that meets the general test of what may constitute an "invention" under Section 2 of the Patent Act.


Federal Court Rules on Scope of "Commercial Activity" under PIPEDA
For companies subject to Canada’s private-sector privacy legislation, the recent Federal Court of Canada decision in State Farm Mutual Automobile Insurance Company v. Canada (Privacy Commissioner) may come as both a relief and a disappointment. The court’s decision sheds some light on the types of "commercial activities" governed by the Personal Information Protection and Electronic Documents Act (PIPEDA), but it failed to settle the issue of PIPEDA’s constitutional validity as it relates to the intra-provincial activities of provincially regulated companies.

Location-Based Services and Privacy Law — Part II
Location-based services, accessible over the Internet and through a wide range of mobile devices, enable a whole range of service providers (and other companies who interface or transact with service providers) to learn where you are located at any time. In this article, we explore the interesting privacy law and related legal issues raised by this state of affairs.


McCarthy Tétrault Lawyer Co-Authors Definitive Reference on Communications Laws and Regulations
McCarthy Tétrault partner and regional leader of the firm’s technology practice in Montréal, Charles S. Morgan, has co-authored a revised and updated edition of Halsbury’s Laws of Canada — Communications. This book is a must-read for lawyers, judges, academics and the general public who need to increase their knowledge of the law governing this important Canadian industry. The recent market entry of new wireless telephony service providers such as Wind, Videotron and Public Mobile, as well as Bell Canada’s recent acquisition of CTV, demonstrate the communications sector’s current dynamism.

Clean Technology

BC’s Clean Energy Act Promises Clean Energy and Cleantech Stimulus
Through its recently enacted Clean Energy Act (CEA), the BC government has set the stage for a protracted stimulus to the province’s clean energy and cleantech sectors. The CEA strengthened existing clean energy policies and enshrined them into law, clearly indicating the current government’s intention to build a strong low-carbon future.

WCI Advances its GHG Cap-and-Trade Regime, Predicting New Green Jobs and Cost Savings
The Western Climate Initiative (WCI) recently released its comprehensive strategy to address climate change and spur a clean energy economy. WCI Partners predict that their strategy will not only reduce greenhouse gas (GHG) emissions, but also foster development of clean technologies, create new green jobs, increase energy security, protect public health, and realize a cost savings of approximately $100 billion US by 2020.