On June 2, 2021, the Québec government reduced the administrative burden relating to international publicity contests by excluding them from the jurisdiction of the Régie des alcools, des courses et des jeux (the “Régie”). It has now followed suit with all types of publicity contests launched on or after October 27, 20231. In concrete terms, this means that businesses launching publicity contests aimed at Quebec participants after this date no longer have to meet reporting obligations or pay prescribed fees to the Régie. Businesses in all sectors of activity use the well-known marketing strategy of publicity contests to attract new customers and build customer loyalty. Quebec has long been sidelined because of the Régie’s distinct requirements in this respect. For businesses wishing to increase their visibility through such contests, the province’s situation is now equivalent to that prevailing in the rest of Canada.  That said, contests launched before October 27, 2023, remain subject to previous requirements—namely the payment of prescribed fees, the posting of a security where required and the filing of a report with the Régie within 60 days of the date on which the winner(s) is (are) declared—if they offer prizes the total value of which exceeds $2,000. We advise you to be careful, however. Despite the eased burden we have mentioned, publicity contests in Quebec must still comply with the requirements of the Criminal Code,2 the Competition Act,3 the Consumer Protection Act4 and the Charter of the French Language,5 as well as applicable privacy, labelling and advertising laws. Bill 17, An Act to amend various provisions for the main purpose of reducing regulatory and administrative burden, S.Q. 2023, chapter 24, sections 75 and following. RSC 1985, c. C-46. RSC 1985, c. C-34. CQLR, c. P-40.1. CQLR, c. C-11.

Do you have the right to copy source code written and developed by someone else? The answer to this question depends on the situation; however, even in the context of open innovation, intellectual property rights will be the starting point for any analysis required to obtain such an answer. In the software industry, open-source licences allow anyone to access the source code of corresponding software, free of charge and with few restrictions. The goal is generally to promote the improvement of this code by encouraging as many people as possible to use it. Linus Torval, the programmer of the Linux kernel (certainly one of the most well-known open-source projects) recently stated that without the open-source approach, his project would probably not have survived.1 However, this approach has legal consequences: Vizio was recently hit with a lawsuit alleging non-compliance with an open-sourceGPL licence used in the SmartCast OS software embedded in some of its televisions. It is being sued by Software Freedom Conservancy (“SFC”), an American non-profit promoting and defending open-source licences. As part of its lawsuit, SFC alleges, among other things, that Vizio was required to distribute the SmartCast OS source code under the above-mentioned open-source GPLlicence, which Vizio failed to do, thereby depriving consumers of their rights2. In Canadian law, section 3 of the Copyright Act3 gives the author the exclusive right to produce or reproduce all or any substantial part of an original work. This principle has been adopted by all signatories of the 1886 Berne Convention, i.e., almost every country in the world. A licence agreement, which may inter alia confer the right to reproduce the work of another person, can take different forms. It also establishes the extent of the rights conferred and the terms and conditions of any permitted use. However, not all open-source licences are equivalent. Many allow creators to attach various conditions to the right to use the code that has been made available. Under these licences, anyone may use the work or software, but subject to the following constraints, depending on the type of licence in effect: Obligation to display: An open-source licence may require disclosure of certain information in the software or in the source code itself, such as the following: The author’s name or pseudonym, or even maintaining the anonymity of the author, depending on their wishes, and/or a citation of the title of the work or software; The user licence of the redistributed open-source work or software; A modification note for each modified file; and A warranty disclaimer. Contribution obligations: Some licences require the sharing of any modifications made to the open-source code, with said modifications being under the same licence conditions. In some cases, this obligation extends to any software that incorporates the open-source code. In other words, code derived from open-source material can itself become open-source. This obligation to contribute can generally be categorized as follows: Any redistribution must be done under the original licence, making the result open-source as well; Any redistribution of the code, modified or not, must be done under the original licence, but other code may be associated or added without being subject to the open-source licence; or Any redistribution is done without any sharing constraints. Ban on commercialization: Some licences prohibit any use for commercial purposes. Apache v2 Level of obligation to contribute upon redistributionAny redistribution of the software, modified or not, or with added components, may be done under other terms. Mandatory elements to display Licence of the redistributed open-source software Identification of any changes made to the code Copyright notice Warranty disclaimer Commercial use permittedYes BSD Level of obligation to contribute upon redistributionAny redistribution of the software can be done without any obligation to share. Mandatory elements to display Copyright notice Warranty disclaimer Commercial use permittedYes CC BY-NC 4.0 Level of obligation to contribute upon redistributionAny redistribution of the software can be done without any obligation to share. Mandatory elements to display Licence of the redistributed open-source software Identification of any changes made to the code Copyright notice Warranty disclaimer Commercial use permittedNo CC0 1.0 Level of obligation to contribute upon redistributionAny redistribution of the software can be done without any obligation to share. Mandatory elements to display Licence of the redistributed open-source software Commercial use permittedYes GPLv3 Level of obligation to contribute upon redistributionAny redistribution of the software, modified or not, or with added components, must be done under the terms of the original licence Mandatory elements to display Licence of the redistributed open-source software Identification of any changes made to the code Copyright notice Warranty disclaimer Commercial use permittedYes, but sub-licensing is not allowed LGPLv3 Level of obligation to contribute upon redistributionAny redistribution of the software, modified or not, must be done under the terms of the original licence. New components can be added, but not integrated, under other non-open-source licences Mandatory elements to display Licence of the redistributed open-source software Identification of any changes made to the code Copyright notice Warranty disclaimer Commercial use permittedYes MIT Level of obligation to contribute upon redistributionAny redistribution of the software can be done without any obligation to share. Mandatory elements to display Licence of the redistributed open-source software Copyright notice Warranty disclaimer Commercial use permittedYes It is important to make programming teams aware of the issues that can arise when using modules governed by what are known as “viral licences” (such as the CC BY-NC 4.0 licence) in the design of commercial software. Such software could lose significant value if such modules are incorporated, making it difficult or even impossible to commercialize said software. In the context of open innovation where developers want to share their code, in particular to encourage collaboration, it is important to understand the scope of these different licences. The choice of the appropriate licence must be made based on the project’s objectives. Also, keep in mind that it is not always possible to change the licence used for the distribution of the code once said distribution has commenced. That means the choice of licence can have long-term consequences for any project. David Cassel, Linus Torvalds on Community, Rust and Linux's Longevity, The NewStack, Oct. 1, 2021, online: https://thenewstack.io. See the SFC press release: https://sfconservancy.org/copyleft-compliance/vizio.html. RSC 1985, c. C-42.

“The value of an idea lies in the using of it.” This was said by Thomas Edison, known as one of the most outstanding inventors of the last century. Though he fervently used intellectual property protections and filed more than 1,000 patents in his lifetime, Edison understood the importance of using his external contacts to foster innovation and pave the way for his inventions to yield their full potential. In particular, he worked with a network of experts to develop the first direct current electrical circuit, without which his light bulb invention would have been virtually useless. Open innovation refers to a mode of innovation that bucks the traditional research and development process, which normally takes place in secrecy within a company. A company that innovates openly will entrust part of the R&D processes for its products or services, or its research work, to external stakeholders, such as suppliers, customers, universities, competitors, etc. A more academic definition of open innovation, developed by Professor Henry Chesbrough at UC Berkeley, reads as follows: “Open innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively.”1 Possible approaches: collaboration vs. competition A company wishing to use open innovation will have to decide which innovation "ecosystem" to join: should it favour membership in a collaborative community or a competitive market?             Joining a collaborative community In this case, intellectual property protections are limited and the object is more focused on developing knowledge through sharing. Many IT companies or consortia of universities join together in collaborative groups to develop skills and knowledge with a view to pursuing a common research goal.             Joining a competitive market In this case, intellectual property protections are robust and there is hardly any exchange of information. The ultimate goal is profit maximization. Unlike the collaborative approach, relationships translate into exclusivity agreements, technology sales and licensing.  This competitive approach is particularly pervasive in the field of video games, for example. Ownership of intellectual property rights as a requisite condition to use open innovation The success of open innovation lies primarily in the notion that sharing knowledge can be profitable. Secondly, a company has to strike a balance between what it can reveal to those involved (suppliers, competitors, specialized third-party companies, the public, etc.) and what it can gain from its relationships with them. It also has to anticipate its partners’ actions in order to control its risks before engaging in information sharing. At first glance, resorting to open innovation may seem to be an imprudent use of intellectual property assets. Intellectual property rights generally involve a monopoly attributed to the owner, allowing it to prevent third parties from copying the protected technology. However, studies have shown that the imitation of a technology by a competitor can be beneficial.2 Other research has also shown that a market with strong intellectual property protections increases the momentum of technological advances.3 Ownership of intellectual property rights is therefore a prerequisite for any company that innovates or wants to innovate openly. Because open innovation methods bring companies to rethink their R&D strategies, they also have to manage their intellectual property portfolios differently. However, a company has to keep in mind that it must properly manage its relations with the various external stakeholders it plans to do business with in order to avoid unwanted distribution of confidential information relating to its intellectual property, and, in turn, profit from this innovation method without giving up its rights. Where does one get innovation? In an open innovation approach, intellectual property can be brought into a company from an external source, or the transfer can occur the other way around. In the first scenario, a company will reduce its control over its research and development process and go elsewhere for intellectual property or expertise that it does not have in-house. In such a case, the product innovation process can be considerably accelerated by the contributions made by external partners, and can result in: The integration of technologies from specialized third-party partners into the product under development; The forging of strategic partnerships; The granting of licences to use a technology belonging to a third-party competitor or supplier to the company; The search for external ideas (research partnerships, consortia, idea competitions, etc.). In the second scenario, a company will make its intellectual property available to stakeholders in its external environment, particularly through licensing agreements with strategic partners or secondary market players. In this case, a company can even go so far as to make one of its technologies public, for example by publishing the code of software under an open-source license, or even assign its intellectual property rights for a technology that it owns, but for which it has no use. Some examples Examples of open innovation success stories are many. For example, Google made its automated learning tool Tensorflow available to the public under an open-source license (Apache 2.0) in 2015. As a result, Google allowed third-party developers to use and modify its technology’s code under the terms of the license while controlling the risk: any interesting discovery made externally could quickly be turned into a product by Google. This strategy, common in the IT field, has made it possible for the market to benefit from interesting technology and Google to position itself as a major player in the field of artificial intelligence. The example of SoftSoap liquid soap illustrates the ingenuity of American entrepreneur Robert Taylor, who developed and marketed his product without strong intellectual property protection by relying on external suppliers. In 1978, Taylor was the first to think of bottling liquid soap. In order for his invention to be feasible, he had to purchase plastic pumps from external manufacturers because his company had no expertise in manufacturing this component. These pumps were indispensable, because they had to be screwed onto the bottles to pump the soap. At that time, the patent on liquid soap had already been filed and Mr. Taylor’s invention could not be patented. To prevent his competitors from copying his invention, Taylor placed a $12 million order with the two sole plastic pump manufacturers. This had the effect of saturating the market for nearly 18 months, giving Mr. Taylor an edge over his competitors who were then unable to compete because of the lack of availability of soap pumps from manufacturers. ARM processors are a good example of the use of open innovation in a context of maximizing intellectual property. ARM Ltd. benefited from reduced control over the development and manufacturing process of tech giants such as Samsung and Apple, which are increasingly integrating externally developed technologies into their products. The particularity of ARM processors lies in their marketing method: ARM Ltd. does not sell its processors as finished processors fused in silicon. Rather, it grants licenses to independent manufacturers for them to use the architecture it has developed. This makes ARM Ltd. different from other processor manufacturers and has allowed it to gain a foothold in the IT parts supplier market, offering a highly flexible technology that can be adapted to various needs depending on the type of product (phone, tablet, calculator, etc.) in which the processor will be integrated. Conclusion The use of open innovation can help a company significantly accelerate its research and development process while limiting costs, either by using the intellectual property of others or sharing its own intellectual property. Although there is no magic formula, it is certain that to succeed in an open innovation process, a company must have a clear understanding of the competitors and partners it plans to collaborate with and manage its relations with its partners accordingly, so as to not jeopardize its intellectual property.   Henry Chesbrough, Win Vanhaverbeke and Joel West, Open Innovation: Researching a New Paradigm, Oxford University Press, 2006, p. 1 Silvana Krasteva, "Imperfect Patent Protection and Innovation," Department of Economics, Texas A&M University, December 23, 2012. Jennifer F. Reinganum, "A Dynamic Game of R and D: Patent Protection and Competitive Behavior,” Econometrica, The Econometric Society, Vol. 50, No. 3, May, 1982; Ryo Horii and Tatsuro Iwaisako, “Economic Growth with Imperfect Protection of Intellectual Property Rights,” Discussion Papers In Economics And Business, Graduate School of Economics and Osaka School of International Public Policy (OSIPP), Osaka University, Toyonaka, Osaka 560-0043, Japan.  

In Cedrom-SNi inc. v. Dose Pro inc. (“Cedrom-SNi”), the Superior Court of Québec rendered a decision which, although issued at the interlocutory stage, is of interest to Canada’s media and entertainment industry since it is one of the rare decisions which analyses the criteria for applying the exception allowing the use of a work for the purpose of news reporting1. In Québec, the Court of Québec (small claims division) has discussed this issue a few times, although without going into an in-depth analysis of the applicable criteria.2 Cedrom-SNi is the first case in which the Superior Court conducts such an analysis. The facts La Presse, Le Devoir and Le Soleil publish articles by their journalists online, making them available to the public. These three print media companies authorized Cedrom-SNi, under an exclusive licence, to reproduce and distribute their publications electronically for media monitoring purposes. Without being authorized to do so and without paying the plaintiffs, La Dose Pro began offering its customers, for a fee, press reviews reproducing the full titles and beginning lines of articles published by La Presse, Le Devoir and Le Soleil. La Dose Pro’s media review named the newspaper which had published the article as well as the date and time of publication, and provided a link allowing readers to access the complete article on the newspaper’s website. However, according to the evidence, La Dose Pro’s customers almost never visited the newspapers’ websites. The names of the journalists were generally not indicated and La Dose Pro did not create any content. Claiming that their copyright was being infringed, La Presse, Le Devoir, Le Soleil and Cedrom-SNi Inc. applied for an injunction to prevent La Dose Pro from reproducing and posting any article found on their respective websites. The law On July 24, 2017, Justice François P. Duprat issued a judgment regarding the application for an interlocutory injunction.3 In it, he analysed two main issues of interest respecting copyright. The first was whether the title and beginning lines of the articles published by La Presse, Le Devoir and Le Soleil were protected by copyright. The protection of a work under the Copyright Act (the “Act”) gives the author the sole right to produce or reproduce the entire work or any substantial part of it.4 Conversely, the author cannot claim the exclusive right to reproduce part of his work that is not substantial, which is what La Dose Pro argued in this case, claiming that the title and beginning lines of an article (which only include one to four sentences) do not constitute a substantial part of the work, which is the complete article. Referring to the leading case of Cinar Corporation v. Robinson5 (“Cinar”), the Court followed the teachings of the Supreme Court of Canada, which had ruled that what constitutes a substantial part of a work must be analysed according to a “qualitative” approach (based on originality) as opposed to a “quantitative” approach. As a general rule, a substantial part of a work is a part which represents a significant part of the author’s skill and judgment as expressed in the work. The Court held that the concept of “skill” includes relying on personal knowledge or an acquired aptitude or practice ability while the concept of “judgment” involves a capacity for discernment or ability to form an opinion or evaluation by comparing different possible options in producing the work, as described by the Supreme Court in CCH.6 The combination of skill and judgment thus implies some intellectual effort. Based on these principles, the Court ruled that the thought and work required to write the title and beginning lines of an article constitute creative work designed to catch the reader’s attention and nothing is left to chance. In this sense, La Dose Pro reproduced a significant part of the work. The fact that La Dose Pro’s clients almost never visit the La Presse, Le Devoir and Le Soleil websites confirms the importance of the title and beginning lines of the article, as they are generally enough to let the reader know what the article is about. The second issue analysed by the Court was whether La Dose Pro’s use of the title and beginning lines of the articles constituted fair dealing permitted under the Act. The Act sets out many exceptions allowing the use of a work protected by copyright which would otherwise constitute infringement. These exceptions may apply where a significant part of a work is used for the purpose of research, private study, education, parody or satire, criticism, review or news reporting.7 To take advantage of an exception, the user must be able to demonstrate that the work is used for one of the exceptions under the Act, which are interpreted broadly, and that the use is fair. For the exception of fair dealing for the purpose of criticism or news reporting to apply, the person reproducing the work must also mention its source and author. In this case, La Dose Pro argued that its actions constituted fair dealing of the works of La Presse, Le Devoir and Le Soleil for the purpose of news reporting under section 29.2 of the Act. After analysing the facts, the Court held that La Dose Pro reproduced the titles and beginning lines of articles other than in a news reporting context. In doing so, La Dose Pro did not provide any comments or discussion for the purpose of making the facts described in the articles known. According to the Court, this did not constitute news reporting. The Court also noted that La Dose Pro only rarely named the authors of the articles which it reproduced and distributed electronically, although they were available on the newspapers’ websites. As to fair dealing, the Superior Court referred to the six factors applied by the Supreme Court in CCH 8 as a foundation for its analysis of the facts: the purpose of the dealing, the character of the dealing, the amount of the dealing, the nature of the work, available alternatives to the dealing, and the effect of the dealing on the work. Regarding the first factor, the Superior Court held that La Dose Pro’s true goal was to generate a profit, not to inform the public since the excerpts were only available to its customers and did not generate traffic to the La Presse, Le Devoir or Le Soleil articles. As to the character of the dealing, multiple excerpts from the articles were broadly disseminated since many employees of the same customer could receive the media review. According to the Court, this constituted unfair dealing. With respect to the third factor, the amount of the dealing, the Court noted that La Dose Pro reproduced only a minimal part of the works, i.e. the title and beginning lines. However, the Court reiterated its conclusion regarding the first part of the test that the title and beginning lines represent a substantial part of the works. Regarding the fourth factor, the Court was of the view that there was an available alternative to the dealing since La Dose Pro could have created original content itself. The fifth factor involves the nature of the work. According to this criterion, the Court must determine whether the use of the work helps to pursue the copyright purpose and aims. On this point, the Court was of the view that, although it is in the interest of the newspapers that the articles be widely distributed to the public, the distribution in question did not increase traffic to their websites. Regarding the last criterion, the effect of the dealing on the work, the Court held that since the use did not generate additional traffic to the websites, it did not generate any revenues for the newspapers. After analysing all the factors, the Court held that the use of the titles and beginning lines in this case was unfair dealing. In its opinion, La Dose Pro’s main motivation was to make a profit through the use of the newspapers’ business model of allowing free access to the works and their reproduction. Conclusion Many decisions discuss the issue of what constitutes the reproduction of a significant part of a work. Although the Cedrom-SNi inc. decision was rendered at the interlocutory stage and does not change the state of the law, it represents a relevant example of how this issue applies in the context of new technology.   Cedrom-SNI inc. v. Dose Pro inc., 2017 QCCS 3383. Saad v. Le Journal de Montréal, 2017 QCCQ 122, para. 29 à 31; Clinique de lecture et d’écriture de La Mauricie inc. v. Groupe TVA inc., 2008 QCCQ 4097 (CanLII), paras. 14 and 15. An interlocutory judgment only settles the dispute pending a final judgment. It is based on the colour of right rather than the demonstration of a clear right, which will be made at the trial on the merits in this case. R.S.C., 1985, c. C-42, s. 3. Cinar Corporation c. Robinson, [2013] 3 SCR 1168, 2013 SCC 73. CCH Canadian Ltd. v. Law Society of Upper Canada, [2004] 1 SCR 339, 2004 SCC 13. Copyright Act, supra, footnote 4, s. 29 to 29.2. CCH Canadian Ltd. v. Law Society of Upper Canada, supra footnote 6.