What is Intellectual Property?

8. Information Technology, Computer, and Internet Law

Information technology encompasses the protection of software, multimedia products, electronic databases and other information-based assets through copyright, patent, trade secret and trademark laws. It also encompasses regulatory laws, for instance, the regulation of data protection, privacy and the Internet.

It contains aspects of commercial law, including, the impact of contract, competition, sales, bankruptcy and tax laws on the distribution and sale of computers and information-based products and services. In addition, it encompasses aspects of electronic commerce (e-commerce) and Internet law, such as the impact of traditional contract, libel and other laws on electronic contracting, advertising, signatures, agents and government filings.

Some issues in the area of Information Technology include:

Formation of an Electronic Contract

An electronic contract (“e-contract”), just like a traditional contract, must fulfill the legal requirements of offer, acceptance and consideration. The Canadian courts generally recognize that if two parties clearly intend to enter into a contract through email or web-based submissions or any other form of electronic communication, their communication of offer and acceptance will produce an enforceable agreement.

The Federal Personal Information Protection and Electronic Documents Act (“PIPEDA”) further sets out a legislative scheme which permits the use of electronic means to fulfill all such requirements set out in federal statutes and regulations that contemplate the use of paper or do not permit the use of electronic means.

To constitute a valid offer, the web site must contain all the material terms and applicable conditions of the e-contract and the steps required to enter into the e-contract. An offer made by electronic means may be seen to imply an authorization to communicate the acceptance by electronic means as well. The rules of offer and acceptance are governed by the law applicable to the parties.

In order to avoid any confusion, electronic offers should specify the method(s) of acceptance, and when and where the e-contract will be deemed to be formed.

Copyright in Computer Programs

Copyright subsists in Canada in “every original literary, dramatic, musical and artistic work” (Copyright Act). Since computer software is considered “literary” work, software is protected by copyright.

In general, programming methods and concepts, mathematical algorithms and other ideas contained in a computer program are not protected by copyright. Only the expression of ideas in a work, and not the ideas themselves, are protected by copyright.

In addition, under Canadian law there is no copyright in data itself, or in mechanical compilations of data, such as telephone numbers, addresses, and postal codes. Copyright protection may be available for a compilation of data that involves skill and judgment in the selection or arrangement of information. The law does not, however, provide any clear direction as to the level of skill and judgment required or how creative the selection or arrangement must be.

Internet / Business Method Patents

In general, a patent is a governmental grant which confers upon the inventor, or the inventor’s assignee, the right to exclude others from making, using, offering for sale, or selling the invention as claimed for the term of the patent.

In order to be patentable, the invention must be novel and non-obvious, and the subject matter of the invention must be a process, machine or composition of matter. Traditionally, abstract ideas and laws of nature are not considered to be patentable subject matter.

Recent US decisions have increased the scope of patentable subject matter to include Internet or business method patents. Internet patents are designed to provide (a) Protection for Internet-related subject matter that includes a method for creating an online community, (b) A method for conducting business using the Internet, and (c) The design of software and/or hardware devices used in the back end of an Internet company.

There seems to be a consensus that Internet patents are the proper subject matter for patents, but that problems arise when patents are granted for known business methods used with the Internet.

Under Canadian law, business schemes, systems for doing business or methods of doing business are not generally viewed as proper subject matter for patents since they are considered to be the product of professional skill, and not a part of the useful or productive arts. This is known as the Business Method Exception. Adding a computer is not seen as altering the business scheme or method and therefore, does not make an otherwise unpatentable subject matter patentable.

According to the new draft guidelines by the Canadian Intellectual Property Office (CIPO), devising a scheme or plan that outlines a method of doing is business is not considered patentable unless the method is integrated into a method or system of showing innovative skill and knowledge. Business method inventions have similar characteristics to computer related inventions, and are examined as innovative methods of applying skill and knowledge.

Alternative approaches for protecting business methods include copyright and trade secret protection. There are important differences that exist between the forms of protection provided by patent, copyright and trade secrets. For instance, copyright only protects original works, whereas a patent gives the first person who filed the patent application exclusive rights to the invention.

Additionally, a patented business method gives the patent owner exclusive rights to the process or methodology described in the patent, whereas copyright protects only the expression of the process or methodology, that is, the drawings and words used to describe the process or methodology.

Finally, trade secret protection is available only as long as the invention remains a secret. Trade secrets do not prevent someone from independently coming up with the same idea and obtaining a patent for it.

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