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Canadian Technology Law Issues 2011/12 Table of Contents

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Canadian Technology Law Issues 2011/12 Table of Contents Canadian technology law issues 2011/12 Canadian technology law issues 2011/12 table of contents Foreword Source and Accept Equity Funds Prudently David W. Pamenter ..................................................................5 Thomas K. Hunter ...................................................................18 Trade-mark Due Diligence Cloud Computing: Legal Risks and Pitfalls Stuart Ash ..............................................................................6 Lisa R. Lifshitz ........................................................................20 Municipal Taxation as a Means of Stimulating Water Supply and Recycling: IP and Commercialization the Green Economy Issues in Canada Douglas W. Clarke ..................................................................8 Daniel R. Polonenko ...............................................................22 Business Method Patents: How Prepared are You? Back to Basics: Employment Contracts 101 Aaron Edgar and Grant W. C. Tisdall .......................................12 Melanie A. Polowin .................................................................24 FISA: Canada’s New Anti-spam Legislation Ontario Blinks: What Next for Renewable Energy and its Impact on Your Business Development in Canada? Roland Hung ...........................................................................14 Thomas J. Timmins .................................................................26 Permission to speak freely, sir? Canadian Electronic Marketing in the FISA Era Eric Gross and Paul Seaman ..................................................16 4 | Canadian technology law issues This publication is for information purposes only. It is not, and should not be taken as legal advice. You should not rely on, or take or fail to take any action, based upon this information. Never disregard professional legal advice or delay in seeking it because of something you have read in this publication. Gowlings professionals will be pleased to discuss resolutions to specific legal concerns you may have. For more information, or to discuss the topics in further detail, please contact Janis Cowie at 416-369-6657 or [email protected] | 5 Foreword by David W. Pamenter Gowlings is pleased to present the third edition of Canadian Technology Law Issues. We have tried to provide something of interest for our very diverse audience. For entrepreneurs, you will find basic tips on employment contracts, risks to consider before jumping into cloud computing and common legal pitfalls to avoid. For more mature clients, David W. Pamenter, Partner we provide content on trade-mark due diligence, business method patents and Canada’s Business Law anti-spam legislation. Toronto 416-862-3611 For clean technology companies, we explore what is up next for renewable energy in Canada, [email protected] the opportunities for commercializing our water supply and wastewater treatment, and municipal tax options for financing energy efficiency. Leader of the Firm’s Technology Industry Gowlings’ integrated Technology Group provides client-focused legal counsel to Canada’s Group, David has over technology industry. We help technology professionals, business executives and the 30 years of experience investment community make fact-based decisions on technology investments and strategies. advising on a wide range We hope you will find the articles useful as your technology business continues to grow of legal issues relating to in the year ahead! technology and cleantech. 6 | Canadian technology law issues Trade-mark Due Diligence by Stuart Ash Effective due diligence is one of the best ways Trade-mark counsel should also request a list to avoid costly and disruptive surprises when of the target’s domain name registrations (if acquiring or licensing trade-marks, allowing not provided) and verify the status of such the purchaser or licensor to determine whether registrations by checking relevant online records. it wishes to proceed with the transaction, for Stuart Ash, Partner Ascertaining Ownership what price, and on what terms and conditions. Intellectual Property Ensuring that the target owns the assets it Effective diligence can also identify deficiencies Ottawa proposes to transfer or license is a fundamental with the target marks and gaps in the target’s 613-786-8667 task of due diligence. Online databases can trade-mark coverage and protection, bringing [email protected] often be used for verification, but local counsel to light important contractual limitations on may need to be engaged where office records Stuart practises in all areas the target’s use of the marks and potential must be searched by hand or where data of trade-mark and copyright infringement liabilities. is only available in a language that trade- law, including IP transactions, While general due diligence checklists are often mark counsel does not speak. Ownership or technology transfer and helpful in generating basic information required for attribution statements in the target’s online and licensing, and software trade-mark due diligence, they are generally not printed materials can also be useful sources of licensing. designed to address key trade-mark issues and information regarding ownership of target marks. rarely provide answers to specific questions that Trade-mark counsel may request copies of the purchaser may have regarding the target marks. assignments and other documents on which Identification of Rights the target bases ownership of marks acquired In an acquisition, the target typically provides a from another party. Care should also be taken to list of trade-mark registrations and applications clarify ownership of marks where the target has as part of its disclosure. The accuracy of the affiliates or subsidiaries that use them: related target’s trade-mark disclosure can often be companies often fail to properly document checked by comparing it against owner searches the ownership and use of “shared” intellectual conducted by trade-mark counsel. In transactions property. Untangling the ownership of marks in where the target has affiliates or subsidiaries such circumstances can be difficult and often that use the target marks (including foreign exposes licensing issues. subsidiaries and affiliates), care should be taken It is similarly important to ensure that the to ensure that all relevant names are searched. purchaser acquires title to the target marks Searches can also be conducted against key free and clear of encumbrances. While some marks if it is suspected that title to the target IP offices allow for the recordation of security marks has not been updated in the relevant IP interests, many jurisdictions do not require (or offices. Consideration should also be given to allow) parties to file security interests against identifying and listing unregistered target marks. trade-marks or other registered intellectual Information regarding such marks (and the property. Trade-mark counsel should therefore goods and services they represent) can often work closely with transaction counsel to be found by reviewing the target’s website and identify any liens, security interests or other printed materials, including product literature, encumbrances that might transfer with the target press releases, public filings (for public marks (especially in circumstances where the companies) and annual reports. target itself or some assets of the target are not being acquired by the purchaser). | 7 Agreement Review The purchaser should also ask the target to provide information relating Agreements establishing trade-mark rights and agreements that to actual or suspected infringements of its marks, and actions it may limit or restrict the use of marks should be reviewed to identify has taken (if any) in response to allegations or complaints of third ongoing obligations that may be acquired by the purchaser and parties or in respect of potential infringement of the target marks. restrictions or limitations on the target’s use of its marks. Coverage and Enforceability Agreements should also be reviewed to ensure that they are Where the trade-marks are material to the transaction, trade-mark transferable to the purchaser (with or without consent) and that the counsel may wish to review the scope and coverage of the target’s parties to the agreement are in compliance with their obligations. marks as well as the enforceability of the target marks. Initial Subject to any materiality thresholds, ongoing obligations (e.g., searches of relevant registries and online searching can be helpful payment or minimum performance specifications) should be noted in identifying whether there are similar marks registered or in use by and brought to the purchaser’s attention. Material restrictions on others in relevant jurisdictions. Such searches can be particularly the target’s usage of its marks (including restrictions on the goods useful in identifying potential bars or obstacles to the purchaser’s and services in association with which the marks can be used, or intended use of the marks post-closing. territorial limitations and restrictions on the manner of use of the A review of the target’s website and printed materials can confirm marks), and onerous or unusual termination, indemnification or whether the target has secured registration of its key marks in choice of law provisions should also be brought to the purchaser’s relevant markets, and whether its existing registrations cover its attention in a timely fashion. current usage of the marks. Evaluate Pending
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