Category Archives: Intellectual Property

So, What the Hell is a NFT, Legally?

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As you may already know, the Internet has been abuzz recently with “NFT“s, or Non-Fungible Tokens, an offshoot of blockchain technology, a form of distributed ledger. Basically, an NFT is an electronic token (an asset, of sorts) that been created and placed on a blockchain , and which is capable of containing certain information and passing from one buyer to the next.

Recently, artists realized that they could personally create and authenticate tokens but associating them with some of their works (think copyright), in essence creating digital tidbits capable of being bought, sold and exchanged, over time. This, couple with a limited supply, created an instant collectors’ market of NFT enthusiasts and who are now investing in upcoming artists, in a manner that is strangely reminiscent of Renaissance patrons of the arts. This allows artists to make some money and collectors to… well… collect.

The numerous stories I’ve been seeing online about this lead me to reflect as to what exactly these little electronic tidbits are, legally I mean. Are people buying art, perhaps electronic copies, or something else?

Legally, the first thing we should note is that this little trend does NOT involve people dealing or trading art (or I.P.) online. No real transfer of rights (intellectual or otherwise) gets created or transferred when buying an NFT-type electronic token, not really anyway. In effect, what will happen upon any of these purchases is that a transaction will be recorded on the blockchain at issue, showing you as the “owner” of such and such token. Period.

Does this grant you a real right of ownership to that intangible? Maybe, maybe not. But one thing for sure, what these transactions do NOT do, is transferring title to any intellectual property, such as the copyrights in this drawing or this photo, for example. So, contrary to some may be thinking reading stories about the NFT-craze, people are not buying the I.P. to copyrighted works using this scheme.

Sure, people may be buying (using the term loosely) something that was created by Mr. X, and then get bragging-rights about it, but little else. Sure the NFT may be one of the few linked to that particular piece of artwork (a music album, for example) but little else. Buying an NFT does NOT get you any real rights to the actual artwork or the I.P. to it.

The truth of it is, at law, we’re not dealing with any asset that can be readily categorized or put in a neat little box here. NFTs are rather a pure creation of the electronic age, before any rights or legislation applies to them. In effect, those who create NFTs decide what little rights (let’s call them that) they are deciding with accompany their offering of NFTs. In practice, this will usually translate to fairly little, for example a personal right (read license) to display a piece of artwork for one’s personal pleasure, etc.

So, if your reflex upon reading this is to ask what a NFT is good for, the honest answer may be: to fill an artist’s pockets. That said, don’t get me wrong, NFTs are a cool idea and I’m all for encouraging budding artists with a modicum of intermediaries who’ll profit in between; let’s just be clear as to what little legal effects are created when buying one of these tokens. At least for now anyway, we’re not dealing with anything that has inherent great value here, aside from what other collectors may be after that is.

Court Rejects Outright Infringement Proceedings Against IKEA Relating to Stuffed Animals

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The Québec Superior Court (the “S.C.”) recently threw out a copyright infringement lawsuit alleging that IKEA had copied a line of stuffed animals from a local artist. Notwithstanding the resemblance between the concepts of the stuffed animals at issue, the court rejected the suit offhand, because it did not relate to any work recognized as such by the Canadian Copyright Act.

The case at issue, Bouchard v. Ikea Canada (2021 QCCS 1376), which pitted a Québec-based artist to the international retailer, alleged that IKEA had illegally copied a line of stuffed animals from Ms. Bouchard, which it then sold in its stores as the Sogoskatt collection. Faced with what she perceived to be a copy of her works, Ms. Bouchard filed copyright infringement proceedings against several parties, including IKEA, before Québec courts.

Unfortunately for Ms. Bouchard, Ikea managed to torpedo her lawsuit at an early stage. To do so, it filed a motion to throw out the case outright because, at law, there really was no real issue to be tried. After examining the motion at issue, the S.C. agreed this case did not present any real issue the judicial system should bother analyzing and taking on. Since this case was introduced as a copyright matter, without any “works” to justify the proceedings at issue, the courts should refuse to further hear the case. Period.

The explanation of this rejection of the case resides in what Ms. Bouchard argued was hers and which IKEA had illegally copied. Namely, the artist testified that, notwithstanding IKEA’s own stuffed animals being different from her own creations, she considered that there were substantial similarities reproducing the distinctive “style” or “look” of her own line of stuffed animals. Unfortunately for her, as you probably know, copyright law does NOT deal well with abstracts like inspiration, ideas, concepts, styles, etc. Rather, copyright is generally concerned with specific works being copied to a substantial degree. Before looking at the substantial degree to which a work has been copied, however, you first need to have… well… a “work”, as defined by the Copyright Act. No work, no possibility of any infringement.

In the case at issue, the works which the artist alleged had been copied had not been copied, or if there was a copy, it was the copy of a style, of a certain look or that of a certain way to make stuffed animals. This, of course, did NOT constitute a copy of the works (the actual stuffed animals) themselves, only of a sort of concept for stuffed animals such as these.

As a result, the S.C. had little trouble throwing out Ms. Bouchard’s case against IKEA. Sorry, but alleging you have a monopoly over a certain style of something does not a monopoly make. Sure, you may be the inventor of a new style or concept of something, but that does not mean you have the exclusive rights to it, at least certainly not by virtue of copyright law. Had this case been presented based on invention or patent rights, industrial designs or trademarks, it may have stood a chance but copyright does NOT extend to abstracts like concepts, ideas and styles. It never did and never will.

CIPO to Try and Accelerate its Processing of Canadian Trademark Applications: About Time!

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This week, CIPO announced several initiatives meant to try and come to grips with the massive backlog that the Trademark Office is facing, along with allowing the fast-tracking of certain applications in the future. With typical delays of 2 to 3 years to obtain a trademark registration in Canada, let’s just say that it’s not a moment too soon.

CIPO made an announcement earlier this week entitled Measures to improve timeliness in examination outlining certain changes to the way examiners process trademark applications.

Essentially, the Trademark Office will now streamline somewhat how it handles applications, including by reducing the content of some of its letters, by processing in priority those applications using the standard list of goods and services (hmm, you think?) and limiting exchanges with applicants and their agents once an argument has been made and rejected.

CIPO also adopted a new Practice Notice this week entitled Requests for expedited examination which creates a new regime for expedited examination in certain cases. Until now, all applications were normally treated the same; This will change. Applicants can now submit a request to expedite their application, along with an affidavit (a statutory declaration) explaining how the applicant qualifies for the fast-tracking of its application.

Before we all start jumping for joy, you should note that such requests for expedited examination are only available in a limited number of situations, namely:

  1. A court action is expected or underway in Canada with respect to the applicant’s trademark in association with the goods or services listed in the application;
  2. The applicant is in the process of combating counterfeit products at the Canadian border with respect to the applicant’s trademark in association with the goods or services listed in the application;
  3. The applicant requires registration of its trademark in order to protect its intellectual property rights from being severely disadvantaged on online marketplaces; or
  4. The applicant requires registration of its trademark in order to preserve its claim to priority within a defined deadline and following a request by a foreign intellectual property office. Note that in such cases, the request will need to be attached to the affidavit or statutory declaration.

Such requests may be submitted, separately from the application itself, either by mail or fax (819-953-2476), by addressing the documents to: “Request for expedited examination, c/o Deputy Director, Examination Division,” etc. Not exactly high-tech stuff, but if it gets the job done, right?

It will be interesting to see how these new rules are handled and used in practice.

So as to end on another positive note, I’ll share an anecdote with you: This week, I received a call from an examiner who elected to call rather than mail me a formal letter and ask us to amend the list of products and services in a pending application. She could just as well have had a letter prepared and sent, but she called instead. As a result, we probably cut 4 to 6 weeks from the processing of this application.