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Focus: Companies responding to copyright infringement in creative ways

Daniels v. Canada at the Supreme Court of Canada
|Written By Yamri Taddese

As technology enables copyright infringements on a massive scale, some companies have adopted innovative ways of dealing with them.

‘People often realize you can make a lot more money by co-operating with other people and licensing out their work,” says Noel Courage.

Take, for example, how Hasbro Inc. is handling fans who want to use its My Little Pony brand in various ways. Although My Little Pony is a children’s TV show, it has an unexpected fan base among adult men fascinated with the animation and characters.

When these fans, nicknamed Bronies, created an online video game based on My Little Pony, Hasbro quickly shut it down, says Bereskin & Parr LLP partner Noel Courage. But the company relented in another way.

“One thing they did agree to do is Hasbro is letting people print ponies with a 3D printer, and you can order them through an online store, which is a very co-operative way to do it,” says Courage.

“So Hasbro is giving up a little bit of control creatively, but they’re still trying to maintain strong control of their brand, which is kind of what you have to do as a trademark owner.”

In an era of the shared economy, that’s one of the ways companies are trying to deal with the illegal proliferation of their brands in the public domain while still engaging their fans, says Courage.

“It’s an interesting way of doing business and dealing with infringement as opposed to trying to shut everybody down,” he adds.

“Particularly with a strong fan base, it’s an innovative way to do things and to work with the fan base and to enable the fan base to do things that are innovative and interesting but still having some control over the situation, too.”

Stéphane Caron, an intellectual property lawyer at Gowling Lafleur Henderson LLP, notes that fan fiction and drawings of characters from shows and books aren’t uncommon. His daughter, for example, is an avid illustrator of ponies from My Little Pony. Often, copyright owners don’t take an issue with that except when fans monetize their products. That’s what makes Hasbro’s model interesting, says Caron. Select users who design their own ponies and get them delivered through three-dimensional printing service Shapeways Inc. can then sell their product to the general public, he adds.

“The challenge that the rights owners face is the fact that with 3D printing, it is now possible to create three-dimensional characters like My Little Pony characters and as the technology becomes increasingly available and cheap, it will be increasingly difficult to control that,” he says.

When the technology does become ubiquitous, the fact that authorized sellers are available would mitigate illegal printings, he notes. “If there are legitimate, authorized, quality services in parallel, I think that will help the industry cope with those challenges. If the only way for the user to generate his or her own [printing] is to do it illegally, then the risk is they will. If they’re given an opportunity to do it legally or illegally, at least they have a choice.”

That’s a hard-learned lesson from the music industry over the years, says Caron, suggesting it’s better to have a legal business model that can generate revenue and is advantageous to all than trying to stop any and all use of a trademark.

The music industry, of course, is a prime example of the impact of large-scale infringements enabled by the Internet. The industry is still trying to figure out how to deal with them and has suffered greatly, says Courage.

Recently, however, the industry has taken some control over the situation by working with Google Inc. The technology giant now has powerful software that tracks down copyrighted songs on YouTube and places ads on them. The revenue from those ads, which will play ahead of the songs, goes to the actual copyright owner instead of the user who posted the video.

The software, called Content ID, is “kind of an interesting and curious tool,” says Courage. He recalls a viral incident from two years ago that later involved the software. Alberta’s Robert Wilkinson, who was at the time facing arrest for drinking and driving, belted out his rendition of the classic Queen song Bohemian Rhapsody while sitting in the back of an RCMP cruiser. When police sent Wilkinson the video recorded in the cruiser as evidence in his case, he uploaded it online at the urging of his friends, according to the National Post.

Sure enough, the video went viral. “It’s a terrible rendition, but there’s ad revenue. If you go on that web site, there are ads that pop up with the video so the copyright owner can divert that revenue,” says Courage.

YouTube gives copyright owners a few options once Content ID tracks down their copyrighted material.

They can elect to mute audio on videos that contain their song or block a whole video from appearing.

They may also track the video’s viewership statistics or monetize the video by running ads against it.

The idea of collaborating isn’t new in the intellectual property field. “People often realize you can make a lot more money by co-operating with other people and licensing out their work,” says Courage.

“Traditionally, it was all an orderly process where you’d have something available and people would license it from you, negotiate licences. Occasionally, a big company would be an infringer or some other competitor would infringe and you would either stop them from using it or you would negotiate a licence with them.”

As the Internet dramatically increases the number of infringers, “now you just can’t do that,” says Courage, adding the old ways of managing infringements is proving tedious or ineffective.

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