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COMPUTER SOFTWARE LAW IN CANADA

This article gives a general description of computer software law in Canada. The information contained in this article is of a general nature only and is not intended to cover the entire area of law relating to computer software in Canada. Furthermore, this information is not directed toward a particular factual situation, and does not constitute legal advice. If you have any questions of a legal nature, or of how the law applies in a particular situation, please consult with a lawyer.



Index



Introduction

Canadian computer software law has had to evolve quickly to keep pace with the rapid evolution of computer technology.

While there is no single statute in Canada covering all aspects of computer software law, computer software may be protected by law in Canada in the following different ways:



Copyright

Copyright law in Canada is one of the principal means of protecting computer software in Canada. Canadian copyright law is governed by the Copyright Act, which protects original literary, artistic, musical and dramatic works. Computer software is protected in Canada as a literary work.

One of the significant rights granted to the owner of Canadian copyright in a work is the exclusive right to reproduce the work, or any substantial part of the work, in any material form whatever.

For example, the owner of copyright in a piece of computer software has the right to stop others from making copies of the software, or any substantial part of the software, whether the infringer makes the infringing copy by copying the software on to a floppy disk, hard disk, CD ROM, or by printing out a hard copy of the software.

(The owner of an authorized and legitimate copy of a piece of software may reproduce a single copy of the software, for backup purposes, provided that the single backup copy is destroyed immediately once the person ceases to be the owner of the authorized copy of the software).

In addition to acquiring the exclusive right to copy the work, the owner of copyright in a work also receives an entire bundle of rights, some of which are specific to the type of work in question. In the case of computer software, this bundle of rights includes the right to rent the software to others, and the corresponding right to restrain others from renting the software.

Canadian copyright comes into existence automatically, and in the case of software, it comes into existence at the time the software was created and continues until the end of the calendar year in which the author of the software dies (regardless of whether the author has sold or assigned the copyright in the software or not) and continues for an additional period of 50 years following the end of that calendar year.

"Moral" rights are also protected under Canadian copyright law. Moral rights in Canada include the right of the author of a piece of software to be associated with the software by name or pseudonym, and the right to remain anonymous. They also include the author's right to the integrity of the software (that is, the author's right to stop the software from being distorted, mutilated or modified, to the prejudice of the author's honour or reputation, or from being used in association with a product, service, cause or institution).

Moral rights remain with the author of a piece of software, even where the software, or the copyright in the software, has been sold or assigned; regardless of whether the author created the software in the employ of someone else, or created it under contract, or otherwise.

Moral rights in software continue to exist until the end of the calendar year in which the author of the software dies (regardless of whether the author has sold or assigned the copyright in the software or not) and continues for an additional period of 50 years following the end of that calendar year.

Copyright in software may be assigned or licensed to others. All assignments and licenses of copyright must be in writing to be valid. The mere transfer of physical possession of a copy of piece of software does not thereby include an assignment of copyright in the software.

While moral rights may not be assigned, these rights may be waived by the author, in whole or in part. A mere assignment or license of copyright in a piece of software does not, in and of itself, amount to a waiver of the moral rights in the software.

It is therefore strongly recommended that, where possible, all assignments and licenses of copyright include a written waiver of the author's moral rights in the software, and that all employees who participate in the creation of a piece of software sign a written waiver of their moral rights in the software.

The software should be marked with a notice in the following form: "© Smith and Company, 1996, All Rights Reserved". That is, the notice should display the copyright symbol ©, followed by the name of the owner of copyright, followed by the year in which the software was published, followed by the statement "All Rights Reserved". This notice is to be displayed in such manner and location as to give reasonable notice of a claim of copyright in the software.

Copyright may be registered in Canada at the Canadian Copyright Office located in Ottawa/Hull. While registration of copyright in software is not required in Canada, registration does provide significant benefits to the copyright owner, and is recommended.

When registering copyright in Canada, there is no need to file a copy of the software with the Canadian Copyright Office. In fact, the Canadian Copyright Office will return any software which anyone attempts to file with them! It is therefore possible to obtain a copyright registration in Canada without having to disclose any of the confidential information which may be contained in the software (although you will have to disclose the software's title).



Patents

In some cases, patent protection may also be available in Canada to protect certain types of computer software.

Canadian patents are available to protect certain new, useful and non-obvious inventions, giving the owner of the Canadian patent the exclusive right, throughout the term of the patent, to make, construct, use and sell the invention in Canada.

Unlike copyright protection in Canada, Canadian patent protection for inventions is not automatic. To obtain the benefits of a Canadian patent, a Canadian patent must be obtained.

Furthermore, to obtain a valid patent for an invention in Canada, the invention must be fully disclosed in the patent specification.

In the case of Canadian patents applied for before October 1, 1989, the patent lasts for a period of 17 years following the grant of the patent. In the case of Canadian patent applications filed on or after October 1, 1989, the patent term is limited to 20 years following the date of the filing of the application for the patent.

While the Canadian Patent Act states: "No patent shall be granted for any mere scientific principle or abstract theorem", nothing in the Canadian Patent Act expressly excludes a computer program from being patented in Canada.

The written policy of the Canadian Intellectual Property Office with respect to patenting computer software is as follows:

  • Unapplied mathematical formulae are considered equivalent to mere scientific principles or abstract theorems which are not patentable under section 27(3) of the Patent Act.
  • The presence of a programmed general purpose computer or a program for such computer does not lend patentability to, nor subtract patentability from, an apparatus or process.
  • It follows from 2, that new and useful processes incorporating a computer program, and apparatus incorporating a programmed computer, are directed to patentable subject matter if the computer-related matter has been integrated with another practical system that falls within an area which is traditionally patentable. This principle is illustrative of what types of computer-related applications may be patentable, and is not intended to exclude other computer-related applications from patentability.

Patents for some types of software have been granted in Canada, and it is recommended that you consult with a Canadian patent agent to discuss whether a particular piece of software would be eligible for a patent in Canada.

As disclosure of an invention prior to filing patent applications in Canada and elsewhere may directly or indirectly result in the loss of patent rights in Canada and elsewhere for that invention, it is strongly recommended that the advice of a Canadian patent lawyer be obtained before any disclosure of the invention is made to anyone.



Trade Secrets and Confidential Information

The law relating to trade secrets and confidential information may also be available to protect computer software.

Trade secret law has arisen out of the broad "duty of good faith" and the principle of equity that whoever "has received information in confidence shall not take unfair advantage of it".

The Supreme Court of Canada has stated that the test for whether there has been a breach of confidence consists of three elements:

  • the information conveyed must be confidential (that is, it must not be public knowledge);
  • the information must have been communicated in confidence;
  • the information must have been misused by the party to whom it was communicated.

As trade secret law in Canada is a matter of provincial jurisdiction, the drafting and interpretation of agreements which contain trade secret provisions must be carried out by a lawyer in the province which governs the agreement in question. Similarly, the assessment of whether a breach of confidence has occurred must be carried out by a lawyer in the province which governs the obligation of confidence.



Contracts

Contracts may also be used to protect computer software.

For example, the owner of copyright in a piece of software may enter into a contract with an end-user, restricting the manner in which the software may be used.

Computer software contracts may be very straightforward or very complex, depending on the wishes of the parties to the contract and the complexity of the circumstances.

When drafting or interpreting the terms of such a contract, it is to be noted that contract law in Canada is a matter of provincial jurisdiction, and the drafting and interpretation of contracts must be carried out having regard to the provincial laws governing the contract in question, and to the federal laws of Canada which are applicable within that province.



Trade-marks

Trademarks may also provide some protection for computer software in Canada.

A trademark is typically one or more words, or numbers, or a design, (or any combination of these) used by a business to distinguish its goods or services from the goods or services of another business.

For example, the Microsoft Corporation uses the MICROSOFT® trade-mark to distinguish its software from LOTUS® software, and other software in the marketplace.

Trade-marks may be registered in Canada at the Canadian Trade-marks Office. The owner of a Canadian trade-mark registration may institute "infringement" proceedings in court to stop others from using that mark, or another mark confusingly similar to it.

Trade-mark registrations must be renewed every fifteen years.

Where a trade-mark has not been registered, it nevertheless may be possible to commence a "passing off" lawsuit to stop others from directing public attention to their wares, or service, or business, in such a way as to cause, or be likely to cause confusion in Canada between their wares (or service, or business) and your wares (or service, or business).

Furthermore, Canadian provincial laws relating to unregistered trade-marks and trade names may be available to assist in the protection of computer software. Consultation with a Canadian lawyer in the province in question is required to answer questions relating to the specific laws applicable in that province.



Integrated Circuit Topography

Computer software which has been or which may be embedded on a semi-conductor chip may also be eligible for protection under Canada's Integrated Circuit Topography Act.

On May 1, 1993, Canada's Integrated Circuit Topography Act came into force providing protection for certain original integrated circuit topographies, which have been registered under the Act, whether the design has been embodied in an integrated circuit product or not.

The Act gives the owner of a registered topography a broad range of rights, including the right to exclude others from:

  • reproducing a registered topography, or any substantial part of one;
  • manufacturing an integrated circuit product incorporating the topography or any substantial part of one;
  • importing or commercially exploiting a topography or any substantial part of one;
  • importing or commercially exploiting an integrated circuit product which incorporates the topography or any substantial part of one.

This Act protects the registered topography itself, and not the idea, concept, process, systems, techniques, or information embodied in the registered topography.

Unlike copyright protection in Canada, protection for integrated circuit topographies is not automatic. To obtain the benefits of the Integrated Circuit Topography Act, a registration of the topography in Canada must be obtained.

The Act protects registered topographies for a period of up to ten years, commencing on the filing date of the application for registration of the topography, and expiring at the end of the tenth calendar year after the calendar year of the first commercial exploitation of the topography, or at the end of the tenth calendar year after the calendar year of the filing date for the application, whichever is earlier.

Topographies, whether registered or not, are transferable by way of assignment and may be the proper subject-matter of a licence.



Other Means of Protecting Computer Software

In some circumstances, the criminal laws of Canada may provide some protection for computer software.

However, the use of criminal law to protect software is beyond the scope of this article, and it is recommended that you consult with a lawyer if you have any questions on this subject.


Conclusion

Canadian computer software law has indeed evolved quickly to keep pace with the rapid evolution of computer technology.

As computer technology continues to evolve in the future, so too will this area of law.


ABOUT THE AUTHOR

Philip B. Kerr is a Canadian lawyer and a registered Canadian Patent and Trademark Agent whose law practice is restricted to patent, trade-mark, copyright and computer law. He was called to the Ontario bar in 1986.

He is a partner in Bowley Kerr Collins, a law firm located at 200 Isabella Street, Ottawa, Ontario, Canada, K1S 1V7. His telephone number is (613) 238-2002, and his facsimile number is (613) 233-7965.


For further information on patents, please feel free to visit Canadian Patent Law, a free Canadian Website.


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