Canadian Gov't Files Brief in RIM Patent Disput e

[David Farber <dave () farber net>]

_______________ Forward Header _______________
Subject:        Canadian Gov't Files Brief in RIM Patent Dispute
Author: Michael Geist <mgeist () pobox com>
Date:           24th January 2005 7:10:56 am

Dave,

Of possible interest to IP -- in what is believed to be a first, the 
Canadian government has intervened in the ongoing U.S. patent dispute 
involving Canadian-based Research in Motion.  The Canadian government 
argues that the U.S. courts are giving U.S. patent law 
extra-territorial effect and ought to reconsider their decision.  The 
NY Times has coverage of the intervention at
http://www.nytimes.com/2005/01/24/technology/24rim.html

A copy of the brief is at
http://patentlaw.typepad.com/patent/files/CAGovBr.pdf

My weekly Toronto Star Law Bytes column, posted below, argues that 
rather than criticizing the Canadian government for its involvement, 
a more appropriate response would be to ask what took it so long, 
since the U.S. has long adopted an aggressive extra-territorial 
approach to intellectual property policy. While there remains doubt 
that the government will stand up for Canadian interests on other IP 
issues, the decision to intervene may foreshadow a greater 
willingness to stand up for the national interest.  Column at
http://geistrimintervention.notlong.com

MG

Why Ottawa should stand on guard in RIM case

Michael Geist
Toronto Star

The acronym IP means a variety of different things to different 
people. To computer scientists, IP refers to Internet Protocol, the 
technical standard that plays a key role in the network design of the 
Internet. To politicians, IP may be used as shorthand for Industrial 
Policy, while economists may think of Innovation Policy. Within the 
legal profession, IP is the acronym for Intellectual Property, which 
encompasses patent, copyright, and trademark law.

Earlier this month, all these "IP"s converged in a single development 
as the Canadian government filed a brief with a U.S. court supporting 
Research in Motion's appeal of a patent infringement decision 
involving wireless email. The decision to file the brief, which asks 
the U.S. court to reconsider its December 2004 ruling against RIM, 
demonstrates a maturation of Canadian intellectual property policy 
that recognizes the need to put the national interest first.

The RIM patent dispute has been brewing since 2001, when NTP, a U.S. 
company that holds a large patent portfolio, sued the Waterloo 
company for patent infringement in connection with its popular 
Blackberry device. A U.S. jury ruled in favour of NTP, awarding it 
$23 million (U.S.) in damages.

  RIM appealed that decision, but in 2002 a U.S. federal court judge 
upped the damage award to $53.7 million. RIM appealed yet again, but 
last month a U.S. appellate court upheld most of the lower court's 
findings.

Determined to pursue every legal option, RIM recently asked the 
appellate court for an "en banc" review, which, if granted, would 
lead to a rehearing of the case. Should its application be denied 
(success in such a review is rare), an appeal to the U.S. Supreme 
Court seems likely.

Ottawa's decision to get involved in the case sparked both surprise 
and criticism. Since the federal government rarely intervenes in 
private litigation, the surprise is understandable. Critics 
suggested, however, that Ottawa should mind its own business and that 
RIM should be prepared to play by the legal rules in the U.S. Such 
criticism is patently absurd.

The U.S. appellate court, which was created in the 1980s specifically 
to address patent matters, adopted an exceptionally expansive 
approach to the scope of U.S. patent law in its decision. An 
important component of NTP's patent infringement claims involve RIM 
activities that occur solely within Canada. Under most of the world's 
patent doctrine, that would effectively limit claims against those 
alleged infringements to legal actions in Canada.

  The U.S. court rejected an approach that stops U.S. patent law at 
the border, however, instead interpreting the law in a manner that 
gives it extra-territorial effect. As the Canadian government argues 
in its brief, the ruling runs contrary to basic principles of comity 
between nations (mutual recognition of others' laws), and negatively 
impacts the "integrity of the operation of Canadian intellectual 
property laws."

  The government's concern is well-placed, since this decision could 
effectively force Canadian businesses operating in Canada to comply 
with two sets of patent rules - both the national Canadian rules as 
well as those exported from the United States.

Not only does the extra-territorial application of U.S. law undermine 
Canadian sovereignty, the particular approach the U.S. appellate 
court has taken to patent issues has generated concern on both sides 
of the border. Adam Jaffe and Josh Lerner, two leading U.S. experts 
on innovation policy, recently argued in their book Innovation and 
Its Discontents that the creation of this particular court has tilted 
the law toward patent holders. In doing so, it has "wreaked havoc on 
innovators, businesses, and economic prosperity."

In light of Jaffe and Lerner's concern that U.S. law stifles new 
innovation, the Canadian government naturally expresses fear in its 
brief that the detrimental consequences of the RIM decision would 
extend to all Canadian businesses, particularly those in the 
technology sector.

In fact, rather than criticizing the government for its involvement, 
a more appropriate response would be to ask what took it so long, 
since the U.S. has long adopted an aggressive extra-territorial 
approach to intellectual property policy.

In the area of domain names and trademarks, it enacted the 
Anti-cybersquatting Consumer Protection Act in the late 1990s. That 
statute grants U.S. courts the right to assert jurisdiction over 
domain name disputes even where the domain name registrant has no 
presence in the country. The extra-territorial effect was tested 
several years ago when a Canadian company hauled a Toronto teenager 
into U.S. court over a domain name registration.

On the copyright front, the U.S. Trade Representative releases an 
annual report in which it opines on the acceptability of foreign IP 
laws. Known as the Section 301 report, it criticizes many countries 
for failing to emulate the U.S. approach to intellectual property 
protection. For example, Canada finds itself in the report this year 
(alongside the European Union and dozens of countries in Asia and 
South America), as the U.S. continues to exert pressure over the 
federal government's "failure" to ratify the flawed World 
Intellectual Property Organization Internet treaties and to provide 
patent protection for higher life forms.

If Canada's decision to intervene in the RIM case foreshadows a 
greater willingness of leaders such as Industry Minister David 
Emerson to stand up for the national interest, the government should 
be congratulated.

  Unfortunately, there remains doubt that Ottawa will practice what it 
preaches. In the face of intense lobbying by U.S. movie and music 
associations in Canadian camouflage, Canadian Heritage Minister Liza 
Frulla and her parliamentary secretary Toronto MP Sarmite Bulte have 
given every indication that they intend to pursue policies that 
prioritize U.S. interests.

For example, ratification of the WIPO treaties, a consistent theme of 
U.S. lobby efforts, would not only stifle Canadian innovation but 
would lead to transfer of millions of dollars in royalties to U.S. 
interests while generating virtually no new compensation back to 
their Canadian counterparts.

  While many rightly criticize the U.S. for its aggressive approach to 
intellectual property policy, its leaders make no bones about the 
fact that the premise of their intellectual property policy is that 
the national interest comes first. Canada too must prioritize its own 
national interest by focusing on intellectual property policies that 
benefit Canadian businesses, schools, and culture. The unusual 
intervention in the RIM patent fight may signal the beginning of that 
recognition, demonstrating the potential for a new era in which 
Canadian IP will come to stand for Independent Policy.
-- 
**********************************************************************
Professor Michael A. Geist
Canada Research Chair in Internet and E-commerce Law
University of Ottawa Law School, Common Law Section
57 Louis Pasteur St., Ottawa, Ontario, K1N 6N5
Tel: 613-562-5800, x3319     Fax: 613-562-5124
mgeist () pobox com              http://www.michaelgeist.ca


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