Author: Demetre Vasilounis

About Demetre Vasilounis

Demetre Vasilounis assists clients with a variety of wealth management and estate and family planning issues. Demetre regularly drafts wills, powers of attorney, domestic contracts, deeds of trust, and other documents relevant to succession planning. Demetre’s practice has a specific focus on the management of digital assets, including online accounts, cryptocurrency, and various forms of intellectual property.

Everyone’s a Critic: Copyright Considerations for YouTube and Twitch Reaction Videos (Part I)

A few months ago, my colleague Jay Kerr-Wilson published this blog post on the intellectual property issues surrounding the phenomenon of “Let’s Play” videos, a genre of online videos where an individual records and broadcasts themselves playing a video game. The individual might film themselves or just provide audio commentary, but in either scenario their own content is layered on top of the game that they are playing. The blog post discusses how this video genre could be considered copyright infringement with respect to the video game being played, as well as why generally we are not seeing infringement cases in this area because of the symbiotic relationship between content creators and video game publishers.

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Cloud Contracts: The Impact of Common Terms of Service Provisions on Intellectual Property Rights

Many people have a great deal of digital content stored “in the cloud”, often through email, social media platforms, file storage and other related services. Whether it is the storage of user-created content, such as photos, videos or documents, or content that users pay to access, such as music and e-books, the use of such services is governed by the Terms of Service (“ToS”)[1] of the relevant company (“online service provider”).  

Despite the often monetary or emotional value of such user-created content, ToS tend to be contracts of adhesion; if a person wants to use an online service provider, they generally have no option but to agree to that online service provider’s ToS. As ToS are almost always unilaterally-generated contracts where the individual has no negotiating power vis-à-vis the online service provider, the reality is that most people usually accept ToS without actually reading them. As a result, many are unaware of how the ToS affect their rights to the accounts with these service providers and the content stored in association with them, or the rights their heirs might have in this regard after they die.[2] This is particularly the case for an individual’s copyright with respect to the content that they create through or store with the online service provider.

This post provides an overview of the findings of a study from the Cloud Legal Project at Queen Mary University of London (the “study”) on some of the most common ToS provisions across major online service providers,[3] specifically with respect to the copyright that users of such online service providers have in the content that they store and/or produce with such online service providers.

ToS Terms Relating to Copyright

According to the Canadian Intellectual Property Office:

A copyright is the sole right to produce or reproduce a work or a substantial part of it in any form. It includes the right to perform the work or any substantial part of it or, in the case of a lecture, to deliver it. If the work is unpublished, copyright includes the right to publish the work or any substantial part of it

Copyright can be created in many ways. A common example is someone taking a photograph with their smartphone. Once the person creates the photo, that person holds the copyright to the photo as an artistic work. Another example could be an .mp3 file that someone creates using audio recording and production software.

In the digital world, many people store the works that they create through cloud-based online service providers, including Facebook, Dropbox and Google Drive. In its analysis of the way the ToS of major online service providers address users’ intellectual property rights, the study distinguishes between a license of copyright, which grants a temporary right to produce or reproduce the work, and an assignment of a copyright, which is an actual transfer of the copyright such that its original owner no longer retains that copyright.

The study analyzed a total of 22 ToS for online service providers that allow users to upload files to their platforms. Some of the study’s most salient findings include:

  • only 10 of the 22 ToS explicitly acknowledged that the user retains their copyright in uploaded works;
  • however, none of the ToS indicated that the user assigns any copyright to the online service provider;
  • 19 of the 22 ToS explicitly provided that the user granted a license of the copyright in uploaded works to the online service provider; and
  • of the 19 ToS that provided such licenses, 16 allowed the online service provider to re-assign the license to a third party;

In addition, the study found that the various ToS took differing approaches to the terms of such licenses. Some granted an “irrevocable” or “perpetual” license to the online service provider, while others provided that the license is terminated when a user’s account is deleted.

Copyright Exclusivity

A question in this area remains: when a user grants licenses to their copyright through an online service provider’s ToS, do such terms encumber the copyright in a way where the user can no longer grant an exclusive right to that work? While many ToS seem to indicate that the user grants a “non-exclusive” license in this regard, the problem arises when the user hopes to grant exclusive licenses to third parties.

For example, if a food photographer has posted a photo on their Instagram page, and then looks to grant a meal delivery company an exclusive license to use that photo of their food, the photo on the Instagram page would, according to Instagram’s ToS, be licensed to Instagram such that it could “host, use, distribute, modify, run, copy, publicly perform or display, translate, and create derivative works” of the photo (subject to the photographer’s privacy settings).[4] This could impact the ability of the food photographer to offer an “exclusive” license to the photo, or, even worse, they could be violating the representations and warranties an existing “exclusive” license by virtue of the photo being on Instagram prior to such granting such license.

Although Instagram’s ToS state that such a “non-exclusive” license ends  when the user’s content is deleted from their systems (i.e. when the user deletes the content individually or deletes their account),[5] this is not the case for all online service provider’s ToS, as indicated above with “irrevocable” or “perpetual” licenses. Therefore, it is possible that certain content already hosted on certain websites may never be able to be exclusively licensable, unless the copyright owner chooses to dispute such an “irrevocable” or “perpetual” license. As we all know, such disputes might be costly to resolve (i.e. through a court).

In Regulating Content on Social Media, Corinne Tan argues that “the ‘ownership’ conferred on a user over his or her content under the ToS is not meaningful, as it does not mirror the exclusive rights to which a copyright holder is ordinarily entitled”.[6] After considering the above example, a user may want to consider the scope of the licenses they are granting to online service providers, both with respect to the duration of such license and the capabilities it grants to the licensor (although often such capabilities are limitless).

Other Issues with ToS

The topic of licenses in ToS highlights, as I suggested earlier in this post, another major issue with ToS: they are almost always unilaterally produced and non-negotiable. Furthermore, it is often the case where an online service provider amends its ToS, for example, to reflect developments in its business or the law. The study found that, rather than seeking the consent or agreement of users to such changes, online service providers’ standard practice is to simply notify users of material changes and effect them without consent. A user’s continued use of the service will then be inferred to constitute assent to the amended terms. 

This issue is particularly magnified when considering that in most instances there is a significant power disparity between an online service provider, often as a large corporation with its own legal team, and the user, often as an individual with little to no legal experience.

However, courts have specifically mentioned and recognized these issues. In Canada, there is at least some jurisprudence to suggest that certain clauses in ToS are unenforceable as a result. In Douez v. Facebook Inc.,[7] the Supreme Court of Canada (“SCC”) determined that a “forum selection” clause in a ToS was unenforceable. In Douez, the clause at issue was a provision in Facebook’s Terms of Use that stated that any disputes between it and a user were to be resolved under California law. The plaintiff in Douez sought to sue Facebook under British Columbia privacy legislation, and thus sought to set aside this clause. The SCC sided with the plaintiff, citing, among other reasons, the inequality and unfairness that inherently exist with ToS.

Concluding Thoughts

The findings of the study highlight some of the issues that ToS may create for users. With an increasing number of people and organizations now storing some of their most important things on the cloud, particularly as remote work arrangements due to the COVID-19 pandemic have quickly pushed many to “go paperless”, some may, for example, not feel comfortable with providing a “perpetual” copyright license to an online service provider. So, with respect to the storage of particularly valuable intellectual property with an online service provider, it would be important to review its ToS to ensure that they do not contain any undesirable clauses.

I would like to thank Yvonne Mazurak, Student-at-Law at Fasken, for helping me write this post.


[1] Also sometimes referred to as “Terms of Use”.

[2] I have written specifically on issues around digital assets and estate planning. For example, please see my three-part series on All About Estates regarding the challenges executors, trustees face in accessing the digital assets of the deceased, as well as another series of posts on this site discussing estate planning considerations for individuals with intellectual property. 

[3] Johan David Michels, Christopher Millar and Srishti Joshi, “Beyond the Clouds, Part 1: What Cloud Contracts Say about Who Owns and Can Access Your Content” (May 11, 2019). Queen Mary University of London, School of Law Legal Studies Research Paper No. 315/2019.

[4] Instagram, “Terms of Use”, online: Instagram (20 December 2020) <https://help.instagram.com/1215086795543252>.

[5] Ibid.

[6] Corinne Tan, “Application of the Terms of Service” in Corinne Tan, Regulating Content on Social Media (London: UCL Press, 2018) 98 at 120.

[7] 2017 SCC 33, [2017] 1 SCR 751.

Key Estate Planning Considerations for Individuals with Intellectual Property (Part III: Patents)

This is the third and final entry in a three-part blog series about the interaction between estates law and intellectual property law. Part I introduced Ontario’s succession law regime, and provided an analysis of succession law vis-à-vis copyright law. Part II applied this analysis to trademark law. Finally, Part III will examine this area in relation to patent law, as well as provide some concluding thoughts and considerations.

Patents

In the previous two blog entries in this series, we have provided an overview of succession law in Ontario, and have applied its principles to the relevant provisions of copyright law and trademark law. This week, we conclude by taking this same approach to patent law; as you will see, patent legislation is in some ways more flexible and in other ways more restrictive than copyright or trademark legislation

A patent provides a time-limited, legally protected, exclusive right to prevent others from making, using and selling an invention. An invention can be a product, a composition (such as a chemical composition), a machine, a process, or an improvement upon any of these (with certain exceptions).

Unlike copyrights and trademarks, patents must be registered in order for their owners to exercise the rights associated with them. According to Subsection 27(1) of the Patent Act, only an inventor or their “legal representative” (which has a similar definition to that of the same term in the Copyright Act) may apply for a patent; thus, it may be possible for a testator’s executor to apply for a patent even after that testator’s death.

On that note, similar to copyrights, it is possible for an inventor’s employer to own a patent; however, the Patent Act does not have any provisions that explicitly state this. Instead, the common law establishes that there is a presumption that an employee will have ownership of their invention, and any resulting patent for discoveries made during the course of employment (See Comstock Canada v Electec Ltd (1991), [1991] FCJ No 987, 29 ACWS (3d) 257). In order to rebut this presumption, there must be an express agreement to the contrary, or the employee must have been hired for the express purpose of inventing or innovating. Therefore, in drafting their will with respect to patent rights, an individual should confirm with their contemplated executor that an employer does not have any potential claims to their patent rights.

Furthermore, with respect to assignments of patents via a will, Subsection 49(1) of the Patent Act allows for the transfer of a patent and/or the right to obtain a patent, in whole or in part. Thus, it would be prudent for an individual who does not apply for a patent for whatever reason while they are alive to inform their contemplated executors of their potential right to obtain said patent and should assign said right in their will. Furthermore, under Section 44 of the Patent Act, in a manner slightly different from copyrights and trademarks, the term of a patent is 20 years from the date that an application for said patent is filed. Thus, while a registered patent expires, the right to obtain a patent does not (subject to satisfying additional requirements for obtaining a patent, such as novelty, obviousness, utility and subject matter), and neither term correlates with the death of the inventor.

All of this suggests that if a testator created a new invention during the course of their life without patenting it, the beneficiaries who received the patent rights under the will (or the residuary beneficiaries if there was no specific patent-related provision in the will) could very well make a successful application for a patent and benefit from the rights of the patent over a 20-year period. The financial value of a patent could be significant, so individuals should definitely account for the potential value of the patent in determining how to distribute their estate. That being said, from a practical perspective it would be prudent for an inventor to apply for a patent while they are alive, as they would most likely be more familiar with key details necessary to complete the application than their beneficiaries would be.

Concluding Thoughts and Considerations

In making provisions for one’s intellectual property rights in their will, it is important to consider provisions related to both assignability and terms with respect to said intellectual property rights. For the former, the key federal statutes grant the ability for one to assign these rights through their will. For the latter, knowing when these rights expire is critical for determining how to manage them in an estate planning (as well as an overall financial planning) context, particularly because they may require continued attention and maintenance from an executor. In any event, it is clear that intellectual property is very much property for the purposes of will-making, and thus one should give any intellectual property that they may own just as much attention as any of their other key assets. Thus, it is essential for one to, prior to their death, keep their executors and trustees (and in many cases, their beneficiaries) in the loop about what intellectual property rights they do or may have.

Key Estate Planning Considerations for Individuals with IP (Part II: Trademarks)

Key Estate Planning Considerations for Individuals with Intellectual Property (Part II: Trademarks)

This is the second entry in a three-part blog series about the interaction between estates law and intellectual property law. Part I introduced Ontario’s succession law regime, and provided an analysis of estates law vis-à-vis copyright law. Part II will apply this analysis to trademark law. Finally, Part III will examine this area in relation to patent law, as well as provide some concluding thoughts and considerations.

Trademarks

In the previous blog entry in this series, we looked at Ontario’s succession law regime. We also applied this regime to the provisions in the Copyright Act that related to the assignment of one’s copyright after their death. This week, we will take the same approach and apply it to trademark law, which definitely has some considerations that distinguish it from copyright law.

A trademark is a combination of letters, words, sounds or designs that distinguishes one company’s good or services from those of others in the marketplace. A trademark is mostly a business-related form of intellectual property, as it often signifies a company’s goods, services, reputation and brand.

A trademark can be registered in the name of an individual, or in the name of a corporation. As opposed to copyrights, which are more related to works of art and entertainment, trademarks pertain to the operation of a business. As such, it may make more sense for a variety of reasons, including from an estate planning perspective, to register a trademark in the name of a corporation. In doing so, a testator could transfer the shares of that corporation to a beneficiary, and that beneficiary would in effect own the trademark because they control the corporation that is the registered owner of said trademark.

The Trademarks Act is the key piece of legislation in this respect, and it contains multiple provisions relevant for the purposes of estate planning. The first is Subsection 48(1), which allows for the transfer of trademarks, whether registered (in which case CIPO requires a fee  of $100) or unregistered. On that note, as with copyrights, trademarks also do not need to be registered. By the same token, registration of a trademark is prudent, as registering a trademark help more effectively enforce trademark rights against third parties.

Unlike copyrights, however, the ownership of a trademark is not subject to the same types of term limitations. As per Subsection 46(1) of the Trademarks Act, the registration of a trademark is valid for an initial period of 10 years, and can be renewed for any number of subsequent 10-year periods as long as the owner pays the renewal fee ($400 for the first class of goods or services to which the request for renewal relates, and $125 for each additional class). However, the registration must occur within six months after the expiry of the initial or renewal period (although there are certain avenues for extending this timeline).

All that being said, individuals planning their estates should be weary of the common law rule against the partial assignment of trademarks. The Exchequer Court of Canada held in Great Atlantic & Pacific Tea Co. v. Canada (1945), [1945] Ex CR 233, 5 CPR 57 that if a person owns a registered trademark for use in Canada in association with certain goods, they cannot validly assign the trademark unless they also assign the whole of the goodwill of the business carried on by them in Canada in association with such wares. As such, an individual should avoid assigning a trademark to one beneficiary and the business with which said trademark is associated to a different beneficiary.

This principle only further supports the notion that registering a trademark in the name of a corporation and then gifting the shares of a corporation to a beneficiary is an effective way of managing a trademark for the purposes of estate planning. Trademark assignment can be a complicated legal area, so it is best for a testator not to separate the trademark from the business with which it is associated.

Key Estate Planning Considerations for Individuals with IP (Part I: Introduction & Copyrights)

This is the first entry in a three-part blog series about the interaction between estates law and intellectual property law. Part I will introduce Ontario’s succession law regime, and provide an analysis of succession law vis-à-vis copyright law. Part II will apply this analysis to trademark law. Finally, Part III will examine this area in relation to patent law, as well as provide some concluding thoughts and considerations.

In the world of will-making, when we think about how the assets of the will-maker (usually referred to as the “testator”) are going to be distributed, we often think about what’s going to happen to their real estate, their vehicles, their jewellery or their other personal belongings. While it is natural for us to first turn our mind to property that is physical or tangible, it is important to ensure that we turn our focus to intangible property as well, as such property often requires more attention and direction.

One form of property that undoubtedly fits this definition is intellectual property. In making provision for one’s friends and family in their will, it is important to consider the financial and sociocultural impact of any intellectual property they may own, and manage such property accordingly. In this blog post, we will go over some key legal considerations, under Ontario and federal law, for the transfer of copyrights, trademarks and patents upon an individual’s death.

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