The Lawyers Weekly - October 1, 2010

Recent developments in both Canada and the U.S. have patent lawyers debating the patentability of business method patents.

The courts and patent offices have struggled to provide an exact definition of business method patents, but they are generally understood to refer to patents that relate to methods of conducting business. The Canadian Patent Office has described business method patents as those relating to commercial or human interactions or behaviours.

In Bilski v. Kappos, decided last June, the U.S. Supreme Court recently approved the “ machine-or-transformation” test as a useful tool, although not an exclusive test, for determining whether an invention was patentable. The court split on a variety of issues, with only a minority of the judges rejecting the patentability of business method patents altogether. The court unanimously rejected the specific invention at issue, a claim to a method of hedging risks for commodities in the energy market, as being an abstract idea.

Several lower courts have considered or will soon consider Bil-

ALAN
MACEK

ski in their rulings on the patentability of business methods and other process patent applications. The United States Patent Office has issued guidelines to patent office examiners on how to apply the Supreme Court’s reasoning to pending applications.

In Canada, the Patent Appeal
Board, an appeals panel within
the Canadian Intellectual Prop-
erty Office (CIPO), rejected Ama-
zon.com’s “one-click” patent
application in April 2009, provid-
ing a lengthy decision that stated,
“[a] claimed invention which in
form or in substance amounts to a
business method is excluded from
patentability.” In Re: Amazon.
com, No. 1290, the panel looked
to the substance of the invention
to determine whether the inven-
tion was technological in nature.
The panel held that Amazon.
com’s claim to performing online
purchases with a single mouse
click was “limited to streamlining
the traditional online ordering
method” and therefore not pat-
entable.

Alan Macek is an associate at Dimock Stratton LLP in Toronto and practises in the area of patent litigation and patent prosecution.

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ISPs cannot expect immunity from liability

ISP
Continued From Page 11

decision, in which Justice G. R. Strathy ordered two ISPs to disclose the names of their customers to the plaintiff. The customers were anonymous authors of allegedly defamatory e-mails and website postings.

Among the factors that the court considered in compelling disclosure of the originators’ identity were that the plaintiff had demonstrated a prima facie case of defamation; the ISPs were “involved” or “implicated” insofar as they provided the conduit for the communications of the e-mails (even though they were not alleged to have been implicated in or liable for the wrongful acts of the originators); the ISPs were the only practical source of information about the originators; and the plaintiff agreed to pay the ISPs’ nominal costs of compliance with the order.

Considering that the ISPs’ agreements with subscribers did not give rise to an absolute expectation of privacy and included prohibitions against tortious acts, the benefit to the plaintiff of obtaining the required information outweighed any prejudice the alleged wrongdoer would suffer from release of the information.

Proposed changes
to copyright law

The fact that ISPs may have legal responsibilities that are different from those of content originators would be codified under an omnibus copyright amendment bill (Bill C-32) that was introduced in Parliament on June 2.

Bill C-32 provides that a person does not infringe copyright in material transmitted or copied on the Internet or other digital network, if the person solely provides the means for the telecommunication or reproduction of a work through the provision of services for the operation of the network. Subject to some conditions, an exemption from liability is also available to a service provider who caches the material or performs some other act to make the communication of the work more efficient, or who provides digital memory to permit another person to store a work.

The bill also introduces a
“notice-and-notice” regime
applicable to Internet and other
network service providers. Spe-
cifically, a person whose copy-
right has been infringed by the
transmission of material over the
Internet may send a notice in a
prescribed form and containing
certain items of information to
an Internet service provider. The
service provider must forward
the notice to the person to whom
the applicable location data
relates, and retain records to
allow for the identification of that
person for a period of at least six
months, or a longer period if pro-
ceedings are commenced.

Fraser Mann is a partner of Miller Thomson LLP in Toronto who practises in the areas of technology and intellectual property law, with an emphasis on IT procurement, outsourcing, licensing and Internet services.

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NEXT WEEK FOCUS NEXT WEEK IN

Real Property

Environmental Law

www.lawyersweekly.ca April2,2010| 9 THELAWYERSWEEKLY

See Neutrality Page 13
FOCUS
Alternative Dispute Resolution
Neutrality
of party-appointed
arbitrators:

|July2,2010 www.lawyersweekly.ca THELAWYERSWEEKLY

Online services lets lawyers act as ‘quarterback’ for real estate transactions FOCUS

Real Property

MY TH OR REALITY?

The new rules have no impact on privacy, a key advantage of arbitration over court proceedings. Litigation is conducted in a public forum, while arbitrations are not. In commercial matters,anyonecanattendin court and search the court file, and journalists frequently do just that. While courts occasionally seal a court file and restrict access to hearings, these protec-tionsarenotassuredandthe public interest in an open court system usually trumps the parties privacy interests. Choice of arbitrator Again, arbitration wins. Judges have a variety of backgrounds and expertise. In the court system, the parties can be assigned a judge who is unfamiliar with specific commercial issues. Parties to an arbitration agreement, however, can choose their own independent and impartial arbitrator with commercial law or industry-specific expertise. Ne w rules maintain arbitration’s edge RANDY PEPPER

www.lawyersweekly.ca June25,2010| THELAWYERSWEEKLY

FOCUS

Wills, Estates, Charities & Trusts

Ontarios new Rules of Civil Procedure were designed to make the civil justice system more accessible and affordable. Other provinces have amended their rules with the same objectives. But do these new rules encourage parties to litigate or arbitrate commercial disputes? To answer this question, we must consider whether the new rules eliminate or lessen the potential advantages of arbitration over conventional litigation. Privacy

Tax shelter promoter faces civil liability

ROBERT HAYHOE

Leading commercial arbitra-
tion texts refer to the notion that
party appointed arbitrators have a
particular duty to the party that
appointed them to ensure that its
arguments are fully understood,
and candidates for such an
appointment may acknowledge
that duty to the party during any
pre-appointment interview pro-
cess. No doubt it is useful for can-
didates for appointment to have
some encouragement, however
slight, to offer parties that are
considering appointing them. But
is it consistent with a true duty of
independence and impartiality for
such statements to be made? A
different question, but one that
should be equally important to
the party making the appoint-
ment, is whether such an under-
taking can be acted on by the
appointee without producing
exactly the opposite of the
intended result. The answer to
both questions is “no.”
All arbitrators on a three member
tribunal, including those appointed
by one side, owe the same duty to
both sides to act with impartiality
and independence. But is this abso-
lutely true in reality? And how does
this duty play out in practice?

WILLIAMG. HORTON

The chair is the most important person in a three-member tribunal. The process for appointing the chair will almost certainly ensure his or her neutrality in theory and in fact. It is extremely rare for the majority in a divided arbitration decision not to include the chair, who serves as the fulcrum of a three member tribunal.

Intimate relations in nursing homes

Consent is compounded by questions of competency and accepted patterns of behaviour. For example, noted Spencer, who is also an adjunctprofessor in the Departmentof

DREAMSTME.COM

There has been a proliferation of tax shelters involving charitable donations in recent years. Although the details have al ways varied among shelters and have changed over time as the courts and Parliament have decided against various shelter structures, one common feature in the shelter has been taxpayers who someho w obtain a charitable donation tax credit worth more than the hard cash paid by the donor in relation to whatever was donated to the charity as part of the shelter. The shelter structures also typically required the charity to pay significant “fundraising fees” to the promoters of the tax shelter.

DREAMSTIME.COM

Lawyers benefit from battle over multiple listing service

JAMESENDCOT/MAGESCOM

See Rules Page 12 Find a Professional www.adrcanada.ca 1-877-475-4353

GOLD S TANDARD ADR:

ADR Institute of Canada

One indication of that support is the
development of guidelines around the
expression of intimacy. Such guidelines,
said Wahl, are important. “Long-term-
care homes are people’s homes. Itshould
be a normalized environment.

Gerontology atSimon Fraser, take the situa-
tion of a resident who is cognitively impaired
and having sex with her spouse, who lives in
the community. “There is a question about
the ability to consent.”
“There are consent issues —and cul-
tural expectations,” she noted, stressing
that, “Children cannot consent. It will still
be an assault.”
“Things are becoming a lot more com-
plex. Services are being provided to more
people with cognitive impairment and
increasing physical needs. We need to be
careful aboutthe assumptions we make,”
said Charmaine Spencer, a lawyer and
research associate with the Gerontology
Research Centre atSimon Fraser Univer-
sity in Vancouver.

“The acuity of needs of people is increasing. A lot more people are not capable,” she added. “Staff needs to address this in an appropriate way.” In the absence of guidelines, there is often no uniform direction for staff and only personal reactions, noted Spencer. “There really is a strong need for guidelines. Otherwise people are trying to address these on an ad hoc basis and personal values really kickin.”

Facilities must find balance between protection and independence

DONALEE MOULTON

Chartered Arbitrators & Mediators

Sex is not only for the young. For older individuals living in nursing homes and other long-term-care facilities, the expression of intimacy raises important, and often unique, issues. It must be appropriate, respectful —and legal.

Agreementof Purchaseand Sale, andconducting
legalsearchesrequiredforopinionontitle. Law-
yerspay$1,000, plus HST(asof July1)in Ontario,
tojointheonlineservice.
ThroughanagreementwithOttawarealestate
agentJoeWilliams—whomTheOttawaCitizen
recentlydubbedthecity’s“mosthatedrealtor”for
eschewingthestandardcommission—Property-
shop.caclientsonlypay$109plusHST,unlessthe
buyerhasanagentandthecommissionisnegoti-
ated, tohavetheirhomeslistedontheMLS.The
MLScontrolsabout90percentofresidentialreal-
estatetransactionsin Canada. Theonlyadditional
chargeis$380(plus HST), paidto Propertyshop.ca,
whichincludesalistingonthe website, photosand
descriptionofthepropertyforsale,andtwosigns:a
largecustom-madeoneforthelawn(withtheprice
listed)anda“talking”onefeaturingathree-minute
pre-recordedinformationmessageontheproperty
whichprospectivepurchaserscanobtainbycallinga
“Weshouldembracethischance,notfearit.”
He’scertainlydoingtheformer.

Sevenyearsago,hehelpedlaunchPropertyshop. ca, anonlineservicein whichresidentialproperty ownersselltheirownrealestate whilerelyingona lawyertoprovidethelegal workandadvice. Backedbysevenlawyers, someofwhomnine yearsagoformedacompanycalled Lawyers Web PropertyShopLtd.thatnowrunsthewebsite, Propertyshop.cacurrentlyhas64Ontariosoloand small-firmlawyers—includingveteranrealestate practitionerandLawSocietyofUpperCanada bencherBobAaron—whocharge,onaverage, betweenoneandone-and-a-halfpercentofthe propertysalepricetoprovideadviceonsuchmat-tersasconditionsforsaleandpurchase, zoning, legaltitleandtitleinsurance, negotiatingthe

CHRISTOPHERGULY

AsthefederalCompetitionBureaubattleswith theCanadianRealEstateAssociation(CREA)over theMultipleListingService(MLS),lawyershave anopportunitytoreturnasthe“truequarterback” ofthesaleorpurchaseofaresidentialproperty, accordingto Ontariolawyer Mike Forcier.

Not that long ago, the issue of intimacy
among long-term-care residents was not
anissue at all. “We’re very good at meeting
the physical needs, spiritual and recrea-
tional [needs]. Traditionally, we haven’t
been good at responding to [resident’s]
sexual needs,” saidJohn O’Keefe, a senior
social worker at Northwoodcare Inc. in
Halifax, which provides a range of living
accommodations for seniors andothers.
“At one time,” he added, “we tried to
keep people apart. Now we have evolved to
the point where we try tosupport consent-
ing adults.”
O’Keefe developed such guidelines for
Northwood a decade ago. They include
guidance on distinguishing between appro-
priate andinappropriate sexual and intim-
ate behaviour; on dealing with residents
who are cognitively aware —and those who
are not; and on inappropriate intimate
behaviour directed towardstaff themselves.
Duty of care is a critical legal issue, said
Wahl, pastchairof the CBA National Elder
LawSection. “The home has a responsibility.
These are people’s homes. These are adults.

Many of those assumptions are related to competency. “Fundamentally, for someone to engage in intimate sexual relations, there mustbe consent,” said Judith Wahl, a lawyer and executive director of the Advocacy Centre for the Elderly in Toronto.

“Lawyerscouldbenegotiatingthecontractand findingoutwhattheclientwantsfromthevery beginning.AndwiththeInternet,there’salreadya hugewealthofinformationoutthereonhomesfor sale.Butpeopleneedsomeonetodecipherthe details—andwhobettertodothatthanalawyer, whohasthespecializedknowledgetodealwith closingsandnegotiations,”saysForcier,a53-year- oldsolegeneralpractitionerin Owen Sound, Ont., whofocusesmainlyonrealestateandfamilylaw.

“If a person has some degree of demen-tia,”she noted, “it does notmean they are not competent or not competent all the time.”

See MLS Page 16

In Innovative Gifting Inc. v. House of the Good Shepherd, [2010] O.J. No. 2210, Justice Roberts of the Ontario Superior Court of Justice decided that promoters of one particular charitable donation tax shelter should not only be prevented from collecting their outstanding fundraising fees, but should also be required to return any fees already paid. Innovative Gifting Inc. (IGI) hadapproached a number of small Canadiancharities with anoffer of gifts of shares and cash. IGI claimed that the shares had been owned by a Swiss philanthropist who wanted to give the shares to individuals in Ca nada who were willing to donate these shares and some cash to Canadian charities and receive a charitable donation receipt equal to the sum of the cash and the then trading value of the shares. The recipientcharity would then be requiredto pay a fundraising fee equal to as much as 18 per cent of the total donatedamount (or 90 per centof the cash donated amount if no shares were received). IGI did raise inexcess of $1 million in cash, whichitprovided to the charities along with shares ina public company with a significant apparentvalue. The charities then paid their fundraising fees of over $1.1 million. The various charities involved eventually became suspicious of IGI and stopped receiving