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mass p2p lawsuit commenced in canada

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I was surprised to see Michael Geist’s post that a new lawsuit is targeting thousands of individuals for unlawfully sharing copyrighted films through peer-to-peer networks. I had thought approach had lost its appeal some time ago. Go and read Mr. Geist’s analysis of how he thinks things will proceed. I have nothing to add on that front. I am curious, however, why it seems (as far as I can tell) that only one carrier, TekSavvy Solutions, seems to have been targeted. I would have thought that carriers having much larger shares of the ISP market would result in a much larger number of prospective defendants and therefore much more rewarding. Then again, I imagine such carriers might also have a larger legal budget. Still, it does seem rather curious to focus only on one, comparatively small, ISP.

Stikeman Elliott appears to be on for Teksavvy (from what I see on the motion record), while Brauti Thorning Zibarras is on for Voltage Pictures, the plaintiff (better known as the firm who launched the defamation claim against Youtube and others on behalf of “Officer Bubbles”).

Will be interesting to see how things play out (unless of course you’re one of the poor souls that are in Voltage’s crosshairs).

mass copyright infringement suit by lawyers given go-ahead

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The Lawyers Weekly reports that a class action lawsuit accusing Thomson Reuters of “mass copyright infringement” was given the green light to proceed last week. There’s a good summary of the facts in the article, but here is my 30 second summary of the summary:

  • lawyers write pleadings, motions, affidavits and other legal documents which are filed with the courts
  • because they are filed with the courts, they are (for the most part) in the public record – anyone who pays a fee can get a copy, but typically only in (somewhat inconvenient) hardcopy
  • Thomson developed an electronic database where it did all the heavy lifting – it went to the courts, paid the fees, collected the hardcopies, scanned and digitized them, and made them available in a convenient and searchable form to subscribers – for a fee

The plaintiffs’ bone of contention is that, while Thomson did do a fair bit of work and paid the relevant court fees as would any individual requesting the same documents, it did not license their use from the authors of those documents, nor pay them for such license. Therefore, Thomson should be found liable for copyright infringement.

There was a good post and interesting discussion on this case on Slaw back in 2010 when the class proceeding was first started, with a number of comments arguing for and against. I was amongst the commentators and my initial reaction, primarily from the perspective of “black-letter” copyright law, was that the plaintiffs seemed to have a reasonably good case, while comparatively, the defendants seem to have a rather weak defence.

Since then, and after giving the matter a bit more thought, I’ve become a bit more ambivalent. There are some competing policy objectives (each of which has its merits) that will need to be considered by the court. One of the distinctions that seem to be made in this case is the fact that Thomson has, apparently, profited quite handsomely from this service, whereas (presumably) individuals who request a single copy do not. Perhaps this is a straw man of my own construction, but I would have thought that many individuals who request copies of pleadings are lawyers, who use such documents in order to do their work, and thereby generate fees. Would it therefore be appropriate to distinguish between the two? Should fair use encompass use through one medium (hardcopy), but not another (digitized and searchable)? Should Thomson’s efforts in taking the time to obtain copies and digitize, index and sort them entitle it to earn a profit from its efforts without an obligation to compensate the original authors? After all, what subscribers are really paying for is not access to the documents themselves, but rather, I would think, how the documents are accessed – it is more cost-effective for them to pay a fee to access pleadings and the like in easily searchable and downloadable form from the convenience of their desk than to schlep around to courts to manually find and retrieve the same documents.

Of course there are other considerations as well – public access to the courts and to the public record, and a number of others. Certainly raises a number of thorny questions. If of interest, I’d encourage you to visit the Slaw article I mentioned above for somewhat more learned debate than my cursory ramblings.

Also, apparently the court chose to certify some (but not all issues). From the article:

The judge certified two common issues relating to Thomson’s alleged conduct. Did the company through its Litigator service: (1) “reproduce, publish, telecommunicate to the public, sell, rent, or hold itself out as the author or owner of court documents?” or  (2)  “authorize subscribers to reproduce, publish, telecommunicate to the public, sell, rent, translate, or hold themselves out as the author or owner of court documents?”

The judge also certified common issues raised by Thomson’s defences: “Does Thomson have a public policy defence to copyright infringement or to the violation of moral rights based on (a) fair dealing, (b) the open court principle, (c) freedom of expression, (d) the necessity of using the idea of the court document as it is expressed, or (e) a business or professional custom or public policy reason that would justify reproducing, publishing, telecommunicating to the public, selling, renting, translating, or holding itself out as the author or owner of court documents?”

Moreover, “did Thomson have the copyright owner’s implicit consent to reproduce, publish, telecommunicate to the public, sell, rent, translate, or hold itself out as the author or owner of court documents?”

Certified as common issues as well: “are class members entitled to injunctive relief” under s. 34(1) of the Copyright Act; and “does Thomson’s conduct justify an award of aggravated, exemplary, or punitive damages?’

more draft regulations to canadian anti-spam legislation published

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A while back I had posted an entry on some draft regulations under Canada’s Anti-Spam Legis­la­tion which were published by the CRTC for public comment.  Those regulations related primarily to consent mechanisms and what information must be provided in e-mails.

Late last week, another round of draft regulations were released. This time, by the Governor in Counsel rather than the CRTC. For what it’s worth, here’s a compressed version of same. I’ve taken the liberty of appending the full wording at the end of the post, which can also be found in the Canada Gazette (with the added bonus of a regulatory impact analysis statement). This summary is a bit wordier as the regulations need a bit of background in order to be properly understood, and are a bit more complicated. Anyway, here it is FWIW:

  1. Section 6(5) of CASL exempts certain types of messages from the requirements to get prior consent and provide certain information before sending e-mails. These include messages to individuals with whom the sender has “personal or family relationships”. The regulations define both of these:
    • a family relationship  means:
      • a blood relationship (children, grandchildren, parents, grandparents, brothers, sisters or others of common or “collateral” descent);
      • relationship by marriage or common-law partnership (including in-laws in either case); or
      • adoption (including blood relations of the person doing the adopting).
    • a personal relationship means a relationship with someone who the sender has:
      • met in person at some point in the past;
      • had a two way communication within the past two years; and
      • the meeting and communication were not related to a “commercial activity”.
  2. Section 10(2) of CASL allows someone  (let’s call that someone the “Original Consentee”) to get consent from a person (let’s call them the “Target”) to send or alter messages or install software on behalf of third parties (let’s call those third parties “Additional Consentees”) whose identities are not known. To do so, there are two requirements: First, the Original Consentee must disclose specific information about itself (see my earlier post). Second, the Original Consentee must comply with the regulations. The regulations basically try to ensure there are seamless links between the Original Consentee and Additional Consentees from the Target’s perspective, as follows:
    • Requirements to send messages:
      • any message sent to the Target must identify the Original Consentee; and
      • each Additional Consentee must provide an unsubscribe mechanism that complies with CASL and which also allows the Target to withdraw consent from the Original Consentee and any other Additional Consentee;
    • Requirements related to withdrawal of consent by a Target:
      • the Original Consentee must ensure that any Additional Consentee who receives withdrawal of consent from a Target notifies the Original Consentee of those for whom consent has been withdrawn (i.e. the Original Consentee, the Additional Consentee receiving the notice of withdrawal, and any other Additional Consentees); and
      • the Original Consentee must:
        • give effect to the withdrawal of consent;
        • promptly notify any other Additional Consentees for whom consent has been withdrawn (other than of course the Additional Consentee who received the withdrawal); and
        • ensure that each other Additional Consentee for whom consent has been withdrawn also gives effect to the withdrawal of consent
  3. Section 6 of the Act provides that consent for messages can be express or implied. However, consent is only implied in certain situations. One of those situations is an existing “non-business relationship”. In turn, there are different categories of “non-business relationship”, one of which membership with a club, association or voluntary organization within two years immediately before the day the message is sent. The regulations clarify what is meant by membership and what constitutes a club, association or voluntary organization:
    • membership means being accepted as a member; and
    • club, association or voluntary organization basically means a non-profit. To drive home the point, the regulation specifies that it can be operated for any purpose other than profit, and that no proprietor, member or shareholder can personally benefit from any income of the organization, except for organizations promoting amateur athletics in Canada.

The concepts are a bit convoluted, particularly those summarized in paragraph 2 above (which, as an aside, I think leave open some questions of interpretation, which I might address in a later post). Perhaps at a later time I’ll try to come up with an illustrative example of how 2 works (or at least my best guess as to how it’s supposed to work). Also, I believe in my previous post I referred to “e-mail”. Just to be clear, the Act applies not only to e-mail, but to any “commercial electronic messages”, which is fairly broad and could include SMS messages, messages through websites, IM, etc.

As with the last set, open for comments for 60 days following the publication date (July 9, 2011).

Full regulation to save you a click:

ELECTRONIC COMMERCE PROTECTION REGULATIONS

DEFINITION

1. In these Regulations “Act” means AnAct to promote the efficiency and adaptability of the Canadian economy by regulating certain activities that discourage reliance on electronic means of carrying out commercial activities, and to amend the Canadian Radio-television and Telecommunications Commission Act, the Competition Act, the Personal Information Protection and Electronic Documents Act and the Telecommunications Act.

PERSONAL RELATIONSHIP AND FAMILY RELATIONSHIP

2. For the purposes of paragraph 6(5)(a) of the Act

  1. (a) “family relationship” means the relationship between individuals who are connected by
    1. (i) a blood relationship, if one individual is the child or other descendant of the other individual, the parent or grandparent of the other individual, the brother or sister of the other individual or of collateral descent from the other individual’s grandparent,
    2. (ii) marriage, if one individual is married to the other individual or to an individual connected by a blood relationship to that other individual,
    3. (iii) a common-law partnership, if one individual is in a common-law partnership with the other individual or with an individual who is connected by a blood relationship to that other individual; and
    4. (iv) adoption, if one individual has been adopted, either legally or in fact, as the child of the other individual or as the child of an individual who is connected by a blood relationship to that other individual; and
  2. (b) “personal relationship” means the relationship, other than in relation to a commercial activity, between an individual who sends the message and the individual to whom the message is sent, if they have had an in-person meeting and, within the previous two years, a two-way communication.

CONDITIONS FOR USE OF CONSENT

3. (1) For the purposes of paragraph 10(2)(b) of the Act, a person who obtained express consent on behalf of a person whose identity was unknown may authorize any person to use the consent on the condition that the person who obtained consent ensures that, in any commercial electronic message sent to the person from whom consent was obtained,

  1. (a) the person who obtained consent is identified; and
  1. (b) the authorized person provides an unsubscribe mechanism that, in addition to meeting the requirements set out in section 11 of the Act, allows the person from whom consent was obtained to withdraw their consent from the person who obtained consent or any other person who is authorized to use the consent.

(2) The person who obtained consent must ensure that, on receipt of an indication of withdrawal of consent by the authorized person who sent the commercial electronic message, that authorized person notifies the person who obtained consent that consent has been withdrawn from, as the case may be,

  1. (a) the person who obtained consent;
  2. (b) the authorized person who sent the commercial electronic message; or
  3. (c) any other person who is authorized to use the consent.

(3) The person who obtained consent must inform, without delay, a person referred to in paragraph 2(c) of the withdrawal of consent on receipt of notification of withdrawal of consent from that person.

(4) The person who obtained consent must give effect to a withdrawal of consent and, if applicable, ensure that a person referred to in paragraph 2(c) gives effect to the withdrawal of consent, in accordance with subsection 11(3) of the Act.

MEMBERSHIP, CLUB, ASSOCIATION AND VOLUNTARY ORGANIZATION

4. (1) For the purposes of paragraph 10(13)(c) of the Act, membership is the status of having been accepted as a member of a club, association or voluntary organization in accordance with the membership requirements of the club, association or organization.

(2) For the purposes of paragraph 10(13)(c) of the Act, a club, association or voluntary organization is a non-profit organization that is organized and operated exclusively for social welfare, civic improvement, pleasure or recreation or for any purpose other than profit, if no part of its income is payable to, or otherwise available for the personal benefit of any proprietor, member or shareholder of that organization unless the proprietor, member or shareholder is an organization the primary purpose of which is the promotion of amateur athletics in Canada.

COMING INTO FORCE

5. These Regulations come into force on the day on which they are registered.

draft regulations to canadian anti-spam legislation published

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Sorry for the absence, blog and readers thereof. I have my reasons. Anyway just a short one this time.  The CRTC published their draft regulations under Canada’s Anti-Spam Legislation (which as many of you isn’t the official short name) which was passed last December but isn’t yet in force.

Nothing particularly earth-shattering. I’ve reproduced the regulations further below, but here’s the ultra short version:

  1. E-mails must set out:
    • name of sender
    • name of the principal on whose behalf the sender is sending (if different)
    • if sender/principal carry on business under other names, those other names
    • physical/mailing address, telephone number, email address and website of sender and principal
  2. If not practicable to include the info and an unsubscribe message in the e-mail, it can be presented through a link in the e-mail or another equally efficient method that doesn’t cost the recipient anything.
  3. Unsubscribe mechanisms cannot take more than two clicks (or something similarly efficient).
  4. Requests for consents (e.g. to receive e-mails or to install software) must include all the information set out in 1 and a statement indicating consent can be withdrawn by using such information.
  5. If software to be installed performs any of the functions specified in s. 10(5) of the Act, then:
    • those functions must be described “separately” from other information in the consent request
    • written acknowledgement must be obtained that the recipient understands and agrees to the performance of those functions

The functions set out in s. 10(5) for which consent must be obtained are (in compressed form):

  • collecting personal information
  • interfering with control of the recipient’s computer
  • changing or interfering with settings, preferences or commands without their knowledge
  • changing or interfering with data that prevents access or use
  • causing the computer system to communicate without the authorization
  • installing software  that may be activated without their  knowledge

I won’t put you through the pain of a rehash of the rest of the Act.

The consultation period ends August 29. Also, apparently there may be other stuff in the official regulation to be published on Saturday.

Here’s the full text for your reading pleasure and to save you a click:

Appendix to Telecom Notice of Consultation
CRTC 2011-400

Electronic Commerce Protection Regulations (CRTC)

DEFINITION

1. In these Regulations, “Act” means An Act to promote the efficiency and adaptability of the Canadian economy by regulating certain activities that discourage reliance on electronic means of carrying out commercial activities, and to amend the Canadian Radio-television and Telecommunications Commission Act, the Competition Act, the Personal Information Protection and Electronic Documents Act and the Telecommunications Act.

INFORMATION TO BE INCLUDED IN COMMERCIAL ELECTRONIC MESSAGES

2. (1)   For the purposes of subsection 6(2) of the Act, the following information must be set out in any commercial electronic message:

(a)   the name of the person sending the message and the person, if different, on whose behalf it is sent;

(b)   if the message is sent on behalf of another person, a statement indicating which person is sending the message and which person on whose behalf the message is sent;

(c)   if the person who sends the message and the person, if different, on behalf of whom it is sent carry on business by different names, the name by which those persons carry on business; and

(d)   the physical and mailing address, a telephone number providing access to an agent or a voice messaging system, an email address and a web address of the person sending the message and, if different, the person on whose behalf the message is sent and any other electronic address used by those persons.

(2)   If it is not practicable to include the information referred to in subsection (1) and the unsubscribe mechanism referred to in paragraph 6(2)(c) of the Act in a commercial electronic message, that information may be provided by a link to a web page on the World Wide Web that is clearly and prominently set out and that can be accessed by a single click or another method of equivalent efficiency at no cost to the person to whom the message is sent.

FORM OF COMMERCIAL ELECTRONIC MESSAGES

3. (1)   The information referred to in section 2 and the unsubscribe mechanism referred to in paragraph 6(2)(c) of the Act must be set out clearly and prominently.

(2)   The unsubscribe mechanism referred to in paragraph 6(2)(c) of the Act must be able to be performed in no more than two clicks or another method of equivalent efficiency.

INFORMATION TO BE INCLUDED IN A REQUEST FOR CONSENT

4. For the purposes of subsections 10(1) and (3) of the Act, a request for consent must be in writing and must be sought separately for each act described in sections 6 to 8 of the Act and must include

(a)   the name of the person seeking consent and the person, if different, on whose behalf consent is sought;

(b)   if the consent is sought on behalf of another person, a statement indicating which person is seeking consent and which person on whose behalf consent is sought;

(c)   if the person seeking consent and the person, if different, on whose behalf consent is sought carry on business by different names, the name by which those persons carry on business;

(d)   the physical and mailing address, a telephone number providing access to an agent or a voice messaging system, an email address and a web address of the person seeking consent and, if different, the person on whose behalf consent is sought and any other electronic address used by those persons; and

(e)   a statement indicating that the person whose consent is sought can withdraw their consent by using any contact information referred to in paragraph (d).

SPECIFIED FUNCTIONS OF COMPUTER PROGRAMS

5. A computer program’s material elements that perform one or more of the functions listed in subsection 10(5) of the Act must be brought to the attention of the person from whom consent is being sought separately from any other information provided in a request for consent and the person seeking consent must obtain an acknowledgement in writing from the person from whom consent is being sought that they understand and agree that the program performs the specified functions.

COMING INTO FORCE

6. These Regulations come into force on the day on which they are registered.

 

electronic document regulations for financial institutions finalized

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Earlier this year (May 8 to be precise), the Canadian federal government published some draft regulations relat­ing to the use of elec­tronic doc­u­ments by fed­er­ally reg­u­lated fin­an­cial insti­tu­tions. You can find a rather brief summary in an earlier post, along with some colour commentary comparing the regulations against similar types of provisions in the Ontario Consumer Protection Act and Electronic Commerce Act. You can find the earlier draft regulations in that post or at the Canada Gazette website (scroll down to the bottom).

In any event, about two weeks ago (November 10 to be precise), the federal government released the finalized regulations for banks and bank holding companies, cooperative credit associations, insurance and insurance holding companies and trust and loan companies.

If you haven’t yet reviewed the legislation, you may want to look at my earlier post, which remains, I think, somewhat useful, as the revisions made between the draft and final regulations are not that significant. If you’d like to see for yourself, I’ve taken the liberty of generating redlines (in Word format) for each of them (banks – redline,  coops – redline, insur – redline and trusts – redline) or you can read the summary below.

There’s basically two items that are common across all the regulations. The first isn’t really much of a change but rather the fixing of the date upon which they come into force, which has now been set for June 1, 2011. The second change is a minor clarification that specific information provided in a consent is only applicable if that consent is provided in writing (whether in paper or electronic form). Here’s the specific change, which looks to be common across all four regulations:

(4) TheIf the addressee’s consent is provided in writing, in paper or electronic form, it must include the name of the information system designated by the addressee for the receipt of the electronic document and a list, in paper or electronic form, of the notices, documents or other information that is covered by the consent.

Seems to make sense, given that such consent can also be provided orally, and that is addressed in the next clause:

(5) If the addressee’s consent is provided orally, the originator or the person acting for the originator must, without delay, provide the addressee in writing, in paper or electronic form, with the information referred to in subsection (2) and confirm the information referred to in subsection (4).

The federal government’s provides the following comments in the related regulatory impact analysis statement (scroll down toward the end) with respect to this change, the in-force date and some changes which had been requested but were not made:

Consultation

After pre-publication of these regulations on May 8, 2010, in the Canada Gazette, Part I, comments related to about 10 different issues were raised from financial industry associations. Only two of the four regulations were commented on, namely the Electronic Documents Regulations and the Policyholders Disclosure Regulations. In addition, the comments did not raise any substantial concerns but rather focused on ensuring that the regulations efficiently achieved the stated policy goals.

As a result, the Government has made minor modifications to the Electronic Documents Regulations to more efficiently handle situations where a customer of a financial institution provides oral consent for the electronic delivery of documents. The previous version of the Regulations appeared to require customers to give financial institutions written documentation when giving consent in call cases — notwithstanding the fact that the Regulations allow for consent to be granted orally. Section 5(4) now sets out the information that must be provided when consent is not provided orally (including the name of the information system designated by the addressee and a list of the notices, documents or other information that is covered by the consent). Section 5(5) goes on to set out the responsibilities of the originator to properly document oral consent and confirm the information received from the customer.

Some comments have not been reflected as stakeholders requested changes that were inconsistent with the policy intent of the regulations. For example, requested changes to the Policyholder Disclosure Regulations would have had the effect of unduly narrowing the scope of information provided to holders of insurance policies with governance rights attached. Other comments to remove from the definition of adjustable policies those where an insurance company can indirectly change the premium or charge for insurance would have had the effect of restricting the Government’s ability to ensure compliance with the regulations.

Implementation, enforcement and service standards

Industry representatives asked that the regulations come into force from six months to one year after final publication, indicating operational challenges (systems, procedures, training). To allow financial institutions sufficient time to prepare documentation in advance of annual general meetings, this package of regulations will come into force on June 1, 2011.

The regulations do not require any new mechanisms to ensure compliance and enforcement. The Office of the Superintendent of Financial Institutions (OSFI) already administers the governance provisions in the federal financial institutions statutes. As such, OSFI would ensure compliance with the new requirements using its existing compliance tools, including compliance agreements and administrative monetary penalties.

standardized seed financing docs for canucks

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Some of my loyal readers may recall one of my posts earlier this year about the development of standardized seed financing docs in the US, where there were, at the time, about four different sets of docs which had been developed. It pointed to a more detailed article by Brad Feld. In any event, I had asked the question whether anyone was aware of a similar initiative in Canada but didn’t hear from anyone. Was actually going to try doing it myself, but free work that you give away sometimes goes quickly to the back burner (or rather off the stove altogether) when things get busy. Least that’s my excuse.

In any event, I was very happy to hear that someone in Canada has in fact undertaken this initiative. The folks at MaRS here in Toronto, and in particular Mark Zimmerman, have apparently developed a nice set of Canadianized templates, including a term sheet (.doc) a subscription agreement (.doc), articles of amendment (.doc) and a shareholders’ agreement (.doc), with a founder’s agreement and employment agreement in the work. They already have a template independent contractor agreement (.doc).

I haven’t had a chance to look at them, but if you happen to need a set of seed round docs, and you’re here in the great white north, I’d encourage you to check them out. The folks at MaRS deserve a pat on the back for taking the initiative.

Tip o’ the fedora to Jonathan Polak for bringing this to my attention.

amazon one-click patent – federal court decision

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If I were to pick a subtitle for this post, it would probably be “Bilski, Canadian style”.

One of my colleagues (Thanks Peter!) was kind enough to mention that the judgement of the Federal Court of Canada (PDF) was released earlier today, so I set aside a few minutes to go through it. Admittedly, I haven’t been following the case all that closely.

In any event, rather than slogging through all 35 pages yourself, the following is a rather abbreviated summary of the decision:

  • After quite a bit of back and forth on the application process, the Commissioner of Patents ultimately rejected Amazon’s patent application in 2009
  • The Commissioner rejected Amazon’s patent on the basis that it was “non-patentable subject matter”, primarily for any one of three reasons:
    • the claimed invention was not physical in nature nor did it result in some change or effect on physical objects;
    • the claims were claims on business methods, which the Commissioner concluded were not patentable; and
    • the claims were not “technological” in nature (meaning that they could be used to address a technical problem) and therefore not patentable.
  • The Federal Court disagreed with each of the Commissioner’s reasons:
    • the Court was of the opinion that the physicality test was too restrictive – instead, the proper test was whether or not the claims had “practical application” – i.e. something that results in a “change in character or condition” and found that Amazon’s claims could meet that standard through Amazon’s customers “manipulating their computer and creating an order”;
    • the Court did not agree that business methods were non-patentable under Canadian law; and
    • the Court did not agree that there was a “technology” test for patentability under Canadian law.

On the first point relating to physicality, the Court’s comments seem to echo, to some degree, the Bilski decision by the US Supreme Court and its rejection of the “machine or transformation” test.

Although the Federal Court did not agree with the Commissioner’s rejection of the patent, it also did not affirm its validity nor did it grant the patent. Instead, it sent back the patent for re-examination.

Of course, there is quite a bit more in the decision itself, including riveting details on novelty, analyses of the process used to assess patentability, elements of that process versus application of same to the patent itself, etc. etc. So consider the bullet points above a gross oversimplification and use accordingly.

fusenet’s employment/entrepreneur program

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A very interesting story in IT World Canada about a company called Fusenet that has put into place a novel approach to business. In effect, it is empowering its employees to become entrepreneurs and giving them equity in their creations. Fascinating approach. Inevitably comparisons can be drawn with a similar program Google runs, but as far as I’m aware Google retains ownership of everything created by its employees. Not so with Fusenet’s model. From the article:

Every Friday, the Pet Project Program (P3) goes into effect. “If you’ve been approved into the program, on Friday, we don’t expect to see you at your desk. You’ll be in our lab or you’ll be collaborating with other people,” said Singhal.

The P3 model is codified into employee agreements and the intellectual property developed during this time does not belong to Fusenet, he said.

If an employee spends three months working every Friday to develop a new technology for better video compression, for example, and then presents it to the company, the idea still belongs to the employee, said Singhal.

Fusenet will ask the employee how much they want to sell the idea for or whether they want to start a company that will sell or license the product, he said. “We’ll help you market that and say, ‘We’ll take 50 per cent of the equity, you take the other 50 per cent,’” he said.

“We will help you with money, we will give you all the resources you need – marketing, customer service, R&D – but you get to keep a significant chunk of the equity in the business as opposed to having just the pride of being able to say you started it,” he said.

The policy applies to all employees, but it’s the software developers who are most likely to come up with the ideas, said Singhal. “We thought this was an interesting model … 99 per cent of the companies out there will take the software,” he said.

Fusenet has experienced one major success, one emerging success and two failures as a result of the model, said Singhal. Another five projects are currently in the R&D stage, he said.

Of course there is a caveat noted in the story about how such an arrangement must be carefully documented. I could also see a few risks associated with this as far as delineation of IP and who owns what. Very often, when new ideas spring up, they may be closely related to some existing intellectual property or based upon it. The question then is where the dividing line is or should be drawn and how that is set out in the documents. Not an insurmountable issue but one that does warrant a bit of thought.

I certainly admire Fusenet for having the vision and courage to adopt such a model. Of course, it’s no guarantee for success but certainly puts all the right incentives in place to have an environment conducive to that. I really do hope to see some interesting things come out of their shop in the near future. They will, after all, be very likely to attract the right sort of folks with this program.

new canadian privacy and anti-spam laws – updated again

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Update 2: Here is a redline showing the changes from the November, 2009 version of ECPA to the May 25 version of FISA, in Word and PDF. The Word version shows the wording of some existing provisions which FISA is amending. You’ll need to scroll over to the right starting around s. 70 to see them. Not included in the PDF version. Doesn’t look like much has changed. Happy reading.

Update: Links to the bills added. See also comments and observations from Barry Sookman, Michael Geist (one on FISA and the other on SCPIA) and David Canton. Mostly just initial observations, except for Mr. Geist’s post on SCPIA. His nickname for the bill (the “Anti-Privacy Privacy Bill”) should give you an idea of his thoughts on it.

Yesterday the federal government announced the tabling of two new significant pieces of legislation. The first is the Fighting Internet and Wireless Spam Act, which has been acronymed as “FISA”. And no, I don’t know why they dropped the W. Maybe easier to pronounce? As many readers probably know, this is the rechristened Electronic Commerce Protection Act that died last year when Parliament was prorogued. In addition to the catchier name, there were a few substantive tweaks to the law. You can read the rather long winded press release though the link above. Alternatively, here’s the point form version:

  • fairly strict and comprehensive approach to unsolicited commercial e-mail (i.e. spam), described as “multi-faceted”
  • enables government agencies to share information with international counterparts to pursue foreign violators
  • sizeable fines for violations – up $1 million for individuals and $10 million for businesses ($15 million in certain cases) for each violation
  • allows businesses and consumers to sue spammers directly, modelled on U.S. laws
  • technology neutral – spam, spim, junk faxes, robocalls – all treated the same

The second piece of legislation are amendments to the existing Personal Information Protection and Electronic Documents Act (or PIPEDA). Doesn’t quite roll off the tongue as nicely as FISA. [Update: The amending act is actually nicely entitled the Safeguarding Canadians’ Personal Information Act which is somewhat sexier.] Point form summary:

  • breach notification requirement – must notify privacy commissioner for material breach and individuals if risk of harm
  • enhanced consent requirements to ensure people (particularly minors) clearly understand the consequences of sharing personal information
  • exceptions added to help people (financial abuse, missing persons, identify dead people)
  • exceptions added for business contact information and to manage employees, information produced for work purposes and due diligence in acquisitions and similar corporate transactions
  • exceptions added for private sector investigations and fraud prevention
  • prohibitions on notifying individuals in connection with disclosure of personal information to law enforcement agencies

More to come in due course.