Management and Enforcement

• Author: David Vaver
• Pages: 558-665

558

CHA PTER 5

management and

enforCement

A. INTRODUCTION

The statutory IP reg imes have been deliberately organized to facilitate a

free national and international market in rights. The rights can, subject to

the occasional minor irritation from competition or other general laws,1

be bought and sold in combin ation, donated, or used to secure f‌inance.2

They may usually be split up hori zontally a nd vertically — by territory,

time, market, and so on — and dealt with accordingly. The maximum

extraction of rents is t hus assured. The right-holder may also transfer or

license some rights while retai ning others. So the copyr ight owner of a

book may assign the German translation right for electronic books for

Germany to one person and m ay licen se the dr amatization right for ten

years to another, while retaining all ot her rights.3 The main obligations

on the right-holder are to pay per iodic maintenance fees for some rights

(e.g., patents), to renew others periodically (e.g., registered trade-marks),

1 E.g., the Bills of Exchange Act, R.S.C. 1985, c. B- 4, s. 13, stil l contains an old

provision requi ring a bill of exchange or promi ssory note given to purcha se an

interest in a pate nt to be marked “Given for a patent right;” other wise the bill or

note is void except again st a holder in due course without notice of the con-

sideration: Gallagher v. Murphy, [1929] S.C.R. 288.

2 Current secur ity systems for IP need reform: s ee sections C(1)(a) “Priority” a nd

(b) “Secured Fina ncing,” in this chapter.

3 Théberge v. Galerie d’Art du Petit Champlain In c., [2002] 2 S.C.R. 336 at [163]

[Théberge].

Management and En forcement 559

and to record title in national IP registrie s, which then operate as a rough

public database of who holds some of what in the IP world.4

This framework ought to be f‌lexible enough to accommodate changes

in practice that respond to new distribution and communication meth-

ods. The Inter net, for ex ample, pro vides opp ortunit ies for f reelanc e auth-

ors to deal directly with users without the intervention of middlemen like

publishers, record companies, or art dealers. In this milieu, speedy stan-

dard click-on licences are more common than signed t ransfers of rights.

Other deals may be harder to conclude. A researcher may f‌ind that

a subject she wants to pursue is strewn with patents and that her pro-

ject falls outside any relevant user right.5 Getting every right-holder’s

consent may be costly or impossible. Pooling and cross-licensing pat-

ents may work, but only for those with something attractive to pool and

license. So t he are a m ay have to be left vaca nt or be under-explored.

The so-called tragedy of the commons, where a resource is depleted by

overuse, can dissolve into a tragedy of the anti-commons, where too

many blocking rights le ad to under-use.6

The framework has other sn ags. Management provisions var y

among IP regimes nationally and internationally. In Canada, the IP

statutes use different language to deal with transfer, licensing, regis-

tration, and cancell ation, even where these concepts are and should

be identical. Traps await t hose who deal with multiple IP rights and

assume that the same framework provisions regulate t hem nationally.7

Problems escalate where deal s are international.

B. ASSIGNMENTS AND LICENCES

1) In te rp ret at io n

What r ight is assigned or licensed is a matter of negotiation, and the

ordinary pri nciples of contract interpretation apply to the result. Inter-

4 The database i s far from complete. Few copyright s are registered, the per-

forming rig hts societies do not put their inventor y online (they need respond

only to reason able requests: Copyright Act, R.S.C. 1985, c. C-42, s. 67 [C Act]),

and no regist ry exists for trade sec rets or common law trade-mark s. But see

S. McJohn, “Patents: Hiding f rom History” 24 Santa Clar a Computer & High

Tech. L.J. 961 (2008), on the usefulness of patent re cords.

5 See section H, “Use rs’ Rights: Free Use,” in chapter 3.

6 M. Heller & R. Eisenberg, “Can Patents Deter Innovation? The Anticommons

in Biomedical Re search” 280:5364 Science 698 (1998); compare R. Epstei n & B.

Kuhlik, “Is There a Biome dical Anticommons?” 27 Regulat ion 54 (Summer 2004).

7 But see section B(3)(b), “Buying and Selling R ights,” in this chapter.

INTELLECTUA L PROPERTY L AW560

pretation is not necessarily a neutral exercise, nor do the same principles

apply worldwide. In copy right and patents, for example, continental

European judges often favour individual authors or inventors over dis-

tributors, construing grants of rights strictly against the grantee and

leaving new uses under the control of the grantor (often the author or

inventor). Some Canadian courts are si milarly incl ined,8 but the trend

is hardly strong or universal. For example, media distributors w ith an

eye towards electronic delivery and future means of exploitation may

ask freelancers to sign contract s that contain a clause transferr ing “all

now or hereafter exist ing rights of every kind and character whatsoever

pertaini ng to said work, whether or not such r ights are now k nown,

recognized or contemplated for all purpose s whatsoever” to the dis-

tributor. Will Canadian court s “construe” this in a lim ited way, or will

they hold it to me an that the grantor has relinqui shed all control over

the work forever in favour of the distributor?9

Freelancers h ave not f ared ver y well in such disputes in common

law jurisdictions.10 Courts purport to apply “neutral” principles of con-

tract inter pretation but often ignore the reality t hat most distribution

contracts are written by and for distributors. Interpreting contracts neu-

trally works best where both par ties have equal knowledge and power;

otherwise neutrality, applied to unequals, simply produces more i n-

equality. That lesson is continually relearned by those enmeshed in the

boilerplate contracts common to the movie and music industry. Con-

tracts that dea l only with existing technologies are often extended to a

new technology by treating it as just an extension or development — ef-

fectively, the old thing in a new guise. Thus, the grantor of performing

rights under a document signed when cinema was unknow n found the

grantee automatically had the f‌ilm rights when movies appeared; grant-

ors of motion picture right s acquired during the silent era often found

they had also magically transferred the ta lking picture rights when

“talkies” came along; and the sale of motion picture rights in 1939 was

8 E.g., Bishop v. Stevens, [1990] 2 S.C.R. 467 [Bishop]; Marquis v. DKL Technologie s

Inc. (1989), 24 C.I.P.R. 289 at 295–96 (Que. S.C.); Comstock Canada v. Electec

Ltd. (1991), 38 C.P.R. (3d) 29 at 51ff. (Fed. T.D.) [Comstock] (patents and de-

sig n s).

9 For example, Muller v. Walt Disne y Productions Inc., 871 F. Supp. 678 (S.D.N.Y.

199 4).

10 E.g., Campbell Conn elly & Co. v. Noble, [1963] 1 W.L.R. 252 (Ch.) (English

contract assi gning full copyri ght in all countries of musica l work together with

“all rights he now h as or may hereafter become ent itled to” includes U.S. rever-

sion rights and (obiter) any new right s later enacted anywhere in t he world);

G. D’Agostino, “Copyright Treatment of Fre elance Work in the Digital Era” 19

Santa Clar a Computers & High Tech. L.J. 37 (2002).