Publications

Packed with valuable information, our publications help you stay in touch with the latest developments in the fields of law affecting you, whatever your sector of activity. Our professionals are committed to keeping you informed of breaking legal news through their analysis of recent judgments, amendments, laws, and regulations.

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  • Amendments to the categories of contracts covered by the exemptions to the obligation of an insurer to assume an insured’s defence—the Regulation to come into force

    On April 20, 2022, the government issued Order in Council 656-2022, which makes significant amendments to the Regulation respecting categories of insurance contracts and classes of insureds that may derogate from the rules of articles 2500 and 2503 (the “Regulation”). The original version of the draft regulation with the same title (the “Draft Regulation”) was the subject of one of our publications last September. The Regulation as amended will come into force on the 15th day following the date of its publication in the Gazette officielle du Québec; that is, on May 5, 2022.  Background In its articles 2500 and 2503, the Civil Code of Québec (the “C.C.Q.”) provides that the costs resulting from actions against an insured over and above the proceeds of insurance provided for in civil liability insurance contracts, including those of the defence, are borne by the insurer. In June 2021, the government amended article 2503 of the C.C.Q. to make it possible for some “categories of insurance contracts” and “classes of insureds” to be determined by regulation to depart from these rules.  It is in this context that the Draft Regulation came about. It was was significantly modified following the numerous comments and observations received from various industry stakeholders. Amendments First, sections 1 and 2 were amended to specify when the insured must meet the conditions referred to in these sections, i.e., “at the time of subscription”. The duration of the contracts covered by the first two sections of the Regulation is limited to one year pursuant to the new section 3. It also specified that in the case of contract renewal, the insured must meet the conditions set out in these sections. The provisions of the former section 5 remain, with the necessary adaptations, and are now found in section 4. Finally, sections 6, 7 and 8 were simply removed. Categories of insured covered Below are the categories of insureds who may subscribe to policies that depart from the rules set out in articles 2500 and 2503 of the C.C.Q.: Section 1 Drug manufacturers under the Act respecting prescription drug insurance;[1] Certain corporations incorporated under a private bill;[2] and Directors, officers and trustees of such businesses, except for their activities as members of a pension committee.   Section 2 Companies that are not referred to in section 1, but that meet one of the following conditions “where the total coverage under all the civil liability insurance contracts subscribed by that insured is at least $5,000,000”: Large businesses for the purposes of the Act respecting the Québec sales tax,[3] that is, businesses that have total taxable sales in a given fiscal year in excess of $10 million; A reporting issuer or subsidiary of such a reporting issuer within the meaning of the Securities Act;[4] A foreign business corporation within the meaning of the Taxation Act[5] or the Income Tax Act,[6] that is, a company that is not resident in Canada; and Directors, officers and trustees of such businesses, except for their activities as members of a pension committee. What to expect The amendments to the Draft Regulation reflect a willingness to simplify its application. In this regard, the removal of section 8 will no doubt be well received. Nevertheless, Quebec continues to be an exception to the principle of full freedom of contract. As a result, small and medium-sized enterprises in certain industries may continue to be affected by the tightening of the insurance market in Quebec, including the manufacturing sector that exports to the United States. It remains to be seen whether the Regulation will change over time. If you have any questions on the subject matter of this article or any other questions, feel free to contact a member of Lavery’s insurance team. [1] A-29.01. [2] Act constituting Capital régional et coopératif Desjardins (C-6.1), Act to establish Fondaction, le Fonds de développement de la Confédération des Syndicats Nationaux pour la coopération et l’emploi (F-3.1.2) and Act to establish the Fonds de solidarité des travailleurs du Québec (F.T.Q.) (F-3.2.1). [3] T-0.1. [4] V-1.1. [5] I-3. [6] R.S.C. 1985, c. 1 (5th Supp.).

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  • Celebrating youth innovation!

    This year’s World IP Day is upon us, with the theme “IP and Youth: Innovating for a Better Future”. In honor of this theme (and at the risk of making our adult readers feel a bit less accomplished), we thought it would be appropriate to highlight some of these wonderful inventions of young, innovative minds. US 8,371,246: Device for drying pets  In 2011, 9-year-old Marissa Streng invented a device to more effectively dry her pet dog Mojo after his baths. The product is now apparently sold under the brand Puff-N-Fluff. US 7,726,080: Under-floor storage   At the age of 14, Rebecca Hyndman patented an under-floor storage system intended for use in locations where tile floors are normally used, such as in kitchens and in bathrooms. As a result of this achievement, she was given the honor of introducing President Obama at the Thomas Jefferson High School for Science and Technology, immediately prior to his signing the America Invents Act into law. US 6,029,874: Article carrying device for attachment to a bicycle for carrying baseball bats, gloves and other sports equipment or objects   Biking to baseball practice can be quite the challenge when one has to carry both a bat and a glove simultaneously. From this problem sprang the “Glove and Battie Caddie”, invented by Austin Meggitt at the age of eleven. The Glove and Battie Caddie holds a baseball, bat, and glove on the front of a bike. US 7,374,228: Toy vehicle adapted for medical use   At the age of 8, young Spencer Whale invented a toy vehicle adapted for transporting a child and their required medical equipment. According to the patent, the toy allows children who are hooked up to medical equipment to move more freely around a hospital, with the intention of making their stay more enjoyable. US 5,231,733: Aid for grasping round knobs   One of the youngest people to obtain a patent was Sydney Dittman of Houston, Texas. In 1992, when Sydney was only 2 years old, she invented a tool out of parts of her toys in order to open kitchen drawers that her parents had told her to stay out of. Upon noticing that the device would be great for handicapped people to use, her father started the patenting process, and the resulting patent issued when Sydney was only 4 years old. Please join us to celebrate youth innovation on this World IP Day!

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  • Autonomous vehicles: insurances, responsibilitie and news

    The pandemic has not slowed down the arrival of self-driving vehicles on our roads. This technological advancement is becoming more and more commonplace, giving rise to a need for deep reflection, especially in the automobile insurance industry. The AMF issue paper On October 20, 2021, the Autorité des marchés financiers (AMF) published an issue paper on self-driving vehicles (SDVs),1 deeming that the developments surrounding them were likely to have “considerable impacts on insurers and on the overall functioning of the automobile insurance system” in Quebec. In it, the AMF addresses several interesting avenues for reflection. The public insurance plan Under the current Highway Safety Code, the Minister of Transport can, through a pilot project, require manufacturers or distributors to reimburse the compensation paid by the Société d'assurance automobile du Québec (SAAQ) following accidents involving an SDV.2 In this context, the AMF is asking whether these manufacturers, distributors and sellers should be able to purchase insurance to protect themselves in the event of this type of claim. Private insurance plans With certain exceptions, the Automobile Insurance Act provides that the owner of a vehicle is liable for property damage caused by their vehicle.3 Human error is currently the primary cause of collisions; however, with the advent of SDVs, attributing liability for accidents will become more complicated. The transfer of liability to vehicle manufacturers and their subcontractors in the event of an accident could lead to a possible shift from insurance policies offering individual coverage to policies designed to protect manufacturers or software developers, for example. The AMF is considering whether the current wording of the automobile insurance policies issued for SDVs should move towards the notion of “using” a vehicle, thus modifying the notion of driving. In addition, direct compensation agreements currently provide that insurers compensate their own insureds for the liability of drivers of other vehicles involved in an accident. They allow subrogation against a third party responsible for the collision, but exclude collisions involving the same vehicle owners. In the context of SDVs, where a manufacturer could retain ownership of the vehicle during use, for example with a fleet of vehicles, there is reason to question the application of these agreements. Their very relevance is in doubt, according to the AMF. The AMF raises other interesting discussion points: Should automobile manufacturers be required to disclose accident data involving SDVs to the SAAQ? What data should be used to determine the insurance premiums associated with an SDV? Should the order of application of manufacturers', subcontractors' and owners' insurance policies in the event of an accident involving SDVs be provided for by regulation? Criminal charges in California As a result of an accident involving an SDV driving in “autopilot” mode, killing two (2) people, the driver of the vehicle was charged with two (2) counts of manslaughter. The accident was caused by the SDV leaving a highway at high speed, running a red light and hitting a vehicle in the intersection. In a previous report, the National Transportation Safety Board (NTSB) already reviewed the concept of “automation complacency,” in which drivers are inclined to rely too much on the self-driving modes currently on the market, which still require drivers' attention. It should be kept in mind that full vehicle automation is not yet available and that drivers remain responsible for the operation of SDVs, which are only partially automated at this time. Disabling Tesla’s “Passenger Play” Since December 2020, Tesla has offered the “Passenger Play” feature in several of its vehicle models, which allows drivers to play video games while the car is in motion. After receiving a complaint from a Tesla driver, the NTSB launched an investigation and determined that this option “may distract the driver and increase the risk of a crash.” In December 2021, Tesla announced that in future updates to the system, Passenger Play would only be available when the car is stationary. Robots as border patrollers The U.S. Department of Homeland Security recently confirmed that a pilot project involving robot dogs in border surveillance at the U.S.-Mexico border is underway. The fleet of robots, called “automated ground surveillance vehicles,” is presented as a “force multiplier.” The project is facing a range of criticism, with regard to its true ability to be a tangible agent of change in terms of border security, but also from community advocates, who accuse the government of going too far for the sake of security. According to the authorities, the robots have the potential to reduce the risk of border officers’ exposure to deadly hazards in an environment that is inhospitable to humans. Driverless buses at Plaza St-Hubert Closer to home, we saw driverless buses circulating freely along Plaza St-Hubert in Montréal last fall. Keolis made its SDVs available for a free 30-minute route with seven (7) stops. The project, implemented by the Ville de Montréal with a grant from the Government of Québec, was designed to test the SDVs in a dense urban environment. Document de réflexion, Préparer le Québec à l’arrivée des véhicules automatisées et connectés, Autorité des marchés financiers, October 21, 2021. Highway Safety Code, CQLR, c. C-24.2, s. 633.1. Automobile Insurance Act, CQLR, c. A-25, s. 108.

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  • Improved Protection of Trainees in the Workplace: Key Points

    On February 24, Bill 14, An Act to ensure the Protection of Trainees in the workplace (hereinafter the “Act”), received assent. The purpose of this Act is to provide better protection for people completing a training in a workplace. For this reason, it contains several provisions similar to those found in the Act respecting labour standards1 (hereinafter the “ALS”). First of all, the Act covers training that is required to obtain a permit to practice issued by a professional order or as part of a program of studies or training program offered by an educational institution that leads to a diploma, certificate or attestation of studies.2   The protection of trainees applies whether the training is paid or not and regardless of where the training is carried out in the workplace, as long as the employer’s residence, domicile, business, head office or office is located in Quebec. It also applies to trainees domiciled or resident in Quebec who do training outside Quebec with an employer.3 OBLIGATIONS FOR THE EMPLOYER The employer, the educational institution and the professional order must inform all trainees of the rights provided for in the Act, allow trainees to be absent for the various reasons provided for in the Act, and ensure that the successful completion of the studies or training, or the obtainment of the permit to practice, is not compromised by the exercise of a right provided for in the Act.4 The legislator expressly provides that the standards relating to training conditions contained in this Act are of public order and that any provision of an agreement or decree that departs from them is absolutely null.5 However, as is the case with the ALS, it is possible to grant trainees more advantageous conditions for completing the training than those prescribed by this Act. PROTECTIONS FOR TRAINEES In line with the provisions already found in the ALS, the Act expands the protection of trainees with respect to statutory holidays, absences and psychological harassment. Statutory holidays: A trainee may be absent from their training on the following days:6 January 1; Good Friday or Easter Monday (employer’s choice); The Monday preceding May 25; June 24; July 1 (or, if this date falls on a Sunday, July 2); The first Monday in September; The second Monday in October ; December 25. However, if the trainee is required to participate in their training on any of these days, they are entitled to a compensatory holiday of one day, to be taken during the training period done with the same employer. There are special provisions for the statutory holiday on June 24.7 Absences due to sickness or family/parental reasons: A trainee may be absent from their training on the following days: Ten (10) days per year due to sickness, to fulfill obligations related to the care, health or education of the trainee’s child or spouse’s child, or due to the health condition of a relative or person for whom the trainee is acting as a caregiver;8 One (1) or five (5) days on the occasion of the death or funeral of a close relative, with the length of the absence determined by the relationship;9 One (1) day on the day of their wedding or civil union, or that of one of the family members listed;10 Five (5) days on the occasion of the birth or adoption of a child, or when a termination of pregnancy occurs after the twentieth (20th) week of pregnancy;11 and For a medical examination related to the trainee’s pregnancy.12 Psychological harassment: The Act provides that every trainee has the right to a training environment free of psychological harassment. The employer and, as the case may be, the educational institution or professional order, must take reasonable measures to prevent psychological harassment and, when such conduct is brought to their attention, to protect the trainee and put a stop to it. The psychological harassment prevention and complaint processing policy must be made available to trainees and applied to them with the necessary adaptations.13 RECOURSE The Commission des normes, de la santé et de la sécurité du travail (hereinafter, the “CNESST”) supervises the implementation and application of the training conditions provided for in the Act.14 Prohibited practices: No employer, educational institution or professional order, or their agents, may end training or dismiss, suspend or transfer, practise discrimination or take reprisals against, or otherwise impose any sanction on a trainee as a result of the trainee exercising a right under the Act, or for certain grounds under section 122 of the ALS.15 A trainee who believes that they have been the victim of a prohibited practice may file a complaint with the CNESST within forty-five (45) days of the occurrence. A non-profit organization dedicated to the defence of students’ rights, a students’ association or a students’ association alliance can also file a complaint with the CNESST on behalf of a trainee who consents to it.16 If it is established to the satisfaction of the Administrative Labour Tribunal (ALT) that the trainee exercised a right arising from the Act, there is a simple presumption in the trainee’s favour that the sanction or measure was imposed because of the exercise of that right. In this case, the employer, educational institution or professional order has to prove that the sanction or action was taken for good and sufficient reason.17 Psychological harassment: A trainee or, as the case may be, a non-profit organization dedicated to the defence of students’ rights, a students’ association or a students’ association alliance, can file a complaint with the CNESST if the trainee believes they have been a victim of psychological harassment. This complaint must be filed within two (2) years of the last occurrence of the conduct. However, the trainee may not file a complaint with the CNESST if they are an employee covered by a collective agreement, insofar as a recourse against psychological harassment is available to the employee under the agreement.18 If the ALT concludes that a trainee has been the victim of a prohibited practice or psychological harassment, it may, among other things, order that the trainee be reinstated in their training with all their rights and privileges, that accommodation measures be implemented, or order to comply with any other measure intended to safeguard the trainee's rights, such as a provisional order.19 PENAL SANCTIONS Any person that contravenes the Act, including by offering training conditions inferior to those specified in the Act, is liable to a fine of $600 to $1,200 and, in the case of a subsequent offence, $1,200 to $6,000.20 The members of our Labour and Employment Law group are available to advise you and answer your questions. CQLR, c. N-1.1. Section 1. Section 1. Section 4. Section 6. Sections 9 and 10. Section 10. Depending on the situation, trainees have the right to be absent on June 25 or the right to a compensatory holiday of one day, to be taken either on the business day before or after June 24, or during the training period done with the same employer. Section 11. Sections 12 and 13. Section 14. Section 15. Section 17. Section 19. Section 7. Section 20. Section 21. Section 25. Section 26. Section 30. Section 32.

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  • Federal Budget 2022: Good News for Mining Exploration Compagnies!

    On April 7, 2022, Finance Minister Chrystia Freeland tabled the federal government’s new budget for 2022. This budget includes several tax measures relevant to the mining industry in Canada. The Canadian federal government intends to provide $3.8 billion over eight years to implement Canada’s first critical minerals strategy. One of the methods used to implement this new strategy and stimulate exploration is an investment vehicle well known to the mining industry: flow-through shares. The 2022 budget proposes to create a new 30% Critical Mineral Exploration Tax Credit (CMETC) for certain specified minerals. Specified minerals that would be eligible for the new CMETC are: copper, nickel, lithium, cobalt, graphite, rare earth elements, scandium, titanium, gallium, vanadium, tellurium, magnesium, zinc, platinum group metals and uranium. As for the regular mineral exploration tax credit, the exploration expenses must have been incurred in Canada. The renunciation of expenses must also have been made under flow-through share agreements entered into after budget day and before March 31, 2027. It is important to note that there will be no cumulation of tax credits. Eligible expenditures will not be eligible for both the proposed new CMETC and the 15% regular mineral exploration tax credit (METC). In order for exploration expenses to qualify for the CMETC, a qualified person (as defined in National Instrument 43–101 issued by the Canadian Securities Administrators) will further have to certify that the expenses renounced will be incurred in the course of an exploration project for specified minerals. On this point, the measure seems to insert a new legal test of “reasonable expectation” that the minerals targeted by the exploration are “primarily specified minerals”. No details have yet been issued on the mechanics of applying this test.  However, if the qualified person is unable to demonstrate that there is a reasonable expectation that the minerals targeted by the exploration project are predominantly specified minerals, the related exploration expenses would not be eligible for the CMETC and consequently, any credit granted for ineligible expenses would be recouped from the flow-through share holder who received the credit. Pending the tabling of a more detailed legislative version, careful attention and planning will therefore be required for new flow-through share financings to ensure that they meet the legal criteria for this new tax credit. Our team of professionals in securities, mining law and taxation is available to answer all your questions regarding this new measure and to assist you in the implementation of a successful flow-through financing: Josianne Beaudry René Branchaud Ali El Haskouri Charles-Hugo Gagné Éric Gélinas Sébastien Vézina

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  • A dismissed employee’s obligation to mitigate damages in the context of the COVID-19 pandemic

    Over the years, the Quebec courts have repeatedly stated that dismissed employees have a duty to mitigate the damages they suffer as a result of a dismissal. This obligation, which is now codified in the Civil Code of Québec,1 has been adapted to the circumstances of the cases over which the courts have presided. The question, then, is whether the COVID-19 pandemic is likely to have an impact on a dismissed employee’s obligation to mitigate damages. The Administrative Labour Tribunal (hereinafter the “ALT”) addressed this issue in its recent decision Tourigny c. Fonds de solidarité des travailleurs du Québec (FTQ)2 (hereinafter the “Tourigny decision”). Background  On August 30, 2021, the ALT upheld Ms. Tourigny’s complaint against a dismissal made without a good and sufficient cause under section 124 of the Act respecting labour standards.3 The complainant, who held a position as director of the Direction Marketing Investissement department before being dismissed on January 28, 2019, claimed, in particular, the wages she lost as a result of her dismissal up to the date of the ALT decision upholding her complaint. The employer argued that the complainant had failed in her duty to mitigate her losses. For her part, the complainant felt that she had done everything in her power to find a job quickly. It should be noted that the COVID-19 pandemic began while the complaint was being heard in court.  Decision on the obligation to mitigate losses  The ALT reiterated, quoting the decision in Durocher c. Lisam America Inc.,4 that dismissed employees have a duty to mitigate damages resulting from their dismissal, even when they are dismissed without good and sufficient cause. This obligation is one of means and is assessed based on the circumstances of each case using the reasonable person test. The ALT further noted, quoting the decision in Agropur, Division Natrel c. Teamsters Québec local 1999 (Montpetit),5 that the duty to mitigate damages consists of two components, namely (1) to make reasonable efforts to find new employment, and (2) not to refuse an offer of employment that is reasonable in the circumstances. In the Tourigny decision, the ALT confirmed that the complainant had failed to mitigate her losses. As such, it reduced the indemnity for lost wages by $34,000, finding that, given the pandemic and the scarcity of job offers, the complainant should have conducted a more thorough job search and been more open to positions that did not perfectly match the job she held prior to her dismissal. Thus, the ALT stated the following: [69] For the Tribunal, during a recession or even a pandemic, when job offers are less important and less financially attractive than in normal times, one must, on one hand, expect to conduct a more rigorous search. [70] On the other hand, one must be more open to offers which, even if they do not correspond exactly to those held in the previous job, are related to the expertise or jobs already held. [our translation]In short, with the pandemic in mind, the ALT deducted two (2) months of gross salary from the indemnity for lost wages, which amounted to $34,000, because: The complainant had taken two (2) trips abroad of about ten days each in the first few months following her dismissal, and the employer did not have to assume the financial consequences of the complainant’s choice to do so; The complainant had been in a management position for a short time and limited her job search to positions similar to the one she held prior to her dismissal. However, limiting herself to management positions with working conditions similar to those she had with the employer—which were exceptional—did not demonstrate a willingness to mitigate her damages. Thus, according to the ALT, the complainant had set aside several positions that could have provided her with a substantial income; and The complainant had applied for only one job during the first eight (8) months following her dismissal and thirty-eight (38) jobs over the next twenty (20) months, that is, fewer than two (2) jobs per month. Her job search efforts were therefore not considered sufficient. Conclusion In short, the Tourigny decision confirms that the context in which employees find themselves is relevant in determining the extent of their obligation to mitigate the damages they suffer as a result of their dismissal. In theory, employers should not be penalized when a dismissed employee fails to put in the necessary effort to find a job during challenging economic times. In circumstances such as these, arising from, say, a pandemic, a dismissed employee must make greater efforts to find a job, failing which the indemnity paid by their former employer may be reduced considerably. The members of our Labour and Employment Law group are available to counsel you and answer your questions. CQLR, c. CCQ 1991, art. 1479. 2021 QCTAT 5548. CQLR, c. N-1.1. 2020 QCTAT 4648. 2018 QCTA 445.

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  • One Out of Five Critical Illness Insurance Claims Are Denied: Which Changes Should Insurers Make?

    The Autorité des marchés financiers (AMF) has recently published a study that it conducted with the largest active insurers in the Quebec insurance industry, entitled “Critical Illness Insurance Supervisory Report”1 (hereafter the “Report”).The study reveals surprising statistics that have led the AMF to issue recommendations for changes to critical illness insurance: Insurers must try to better explain insurance products to consumers in order to help them better understand the policies they are buying. Critical illness insurance   Critical illness insurance is insurance that consumers can purchase for themselves or a loved one. It provides for the payment of a sum of money should the insured suffer from a critical illness that matches the definition set out in their insurance contract. The illnesses that are typically covered by this type of insurance are cancers (at a life-threatening stage), heart attacks and strokes. In general, the following principles apply to critical illness insurance: Each policy has a list of illnesses it covers. An insurance policy may also specify exclusions to covered illnesses. When an insurance policy covers a critical illness and no exclusions apply, it may have other conditions such as a waiting period2 or a survival period,3 which can vary from one insurance policy to another. AMF findings   The AMF found that insurers deny one out of five critical illness insurance claims. In its Report, it notes that, in general, consumers face several issues with critical illness insurance, both in terms of understanding the product and with its purchase. These issues appear to result from the lack of information, clarity, support and consumer understanding. Covered illnesses and their characteristics differ from one product to the next and from one insurer to another. This makes it hard for consumers to easily compare available products. Moreover, the language used to describe products and draft policies is often complex. Insurance policies also contain many limitations and exclusions (such as pre-existing conditions) and various time limits that can be hard to grasp. AMF Recommendations   Based on its findings, the AMF has developed five recommendations for insurers, and it expects insurers to apply corrective action. For the time being, the AMF does not intend to apply sanctions, but says that it will “take appropriate action when required.”4 Avoid situations where prepared materials and advertising result in confusion for consumers or in an incorrect understanding of the product Insurers must exercise care in how they use statistics and slogans in their materials and advertising. The AMF believes that certain forms of advertising can lead consumers to misunderstand the provided coverage because of statistics and slogans that are broader than the actual coverage set out in a contract. Insurers must keep to information that is relevant to the actual features of the product offered. The AMF insists that “it should not appear to consumers as if the product covers more than it really does or as if they require more insurance than they really need.” Better help consumers properly understand the product An insurance policy may cover different illnesses and may contain varying features. The vocabulary used in critical illness insurance contracts is often technical and specific to medical and insurance fields. Insurers should provide relevant and complete information written in accessible language to avoid confusion with the insured. The AMF suggests that insurers make tools such as guides, glossaries, summaries, illustrations and timelines available to help consumers better understand the features of their insurance policies, the scope of their coverage and any limitations, exclusions, time limits, and so forth. Provide insureds with post-purchase assistance The AMF indicates that support after purchasing critical illness insurance is key to help the insured better understand their rights and obligations and when to exercise them. It suggests that insurers implement post-purchase information communication mechanisms, such as making information available on a secure website, periodic statements or reminders of options that can be exercised. Better equip the distribution channels to appropriately advise their clients The AMF stresses that the various distribution channel stakeholders must be able to provide clear and relevant information to the insured over the entire lifecycle of the product. To do so, insurers should improve their training programs and provide appropriate reference tools to their distribution channels, which could include product features, the target client group for each product and a comparison with other types of products to assist customers in making choices. Facilitate the claims, complaint examination and dispute resolution processes Insurers must ensure that they provide sufficient information to the insured and fairly process claims. The AMF suggests that insurers make claims processes and claim forms easily accessible on their websites. The reasons for denying a claim should also be clearly explained in the letter to the insured, and the letter should outline the next steps, such as the opportunity to request a review or to file a complaint. Conclusion   Insurers offering critical illness insurance products should implement the recent AMF recommendations to better inform consumers on their rights and obligations and on products offered and the coverage they provide. By implementing the AMF’s suggestions into their critical illness insurance activities, insurers will not only reduce the claims denial rate in the industry, but also avoid potential litigation. Autorité des marchés financiers, Critical Illness Insurance Supervisory Report (Report), Québec City, 2021. [Report] Time period that must elapse before critical illness coverage comes into force after the insurance policy is issued. Time period that must elapse before compensation after a critical illness is diagnosed. Report, p. 7.

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  • Self-insurance: possible if in accordance with the Insurers Act

    Introduction There are multiple insurance policies available on the market to protect your property in Quebec. But how well do you know all your options? In 2016, we addressed peer-to-peer insurance, which is essentially a community of users wanting to insure similar goods and services together.1 However, in November 2021, the Superior Court of Québec rendered an interesting decision2 on self-insurance in the context of insurance offered by two (2) student associations. This form of insurance suggests that the first part of compensation be borne by the insured, who cannot therefore transfer this part of the risk to a third party. The decision of the Superior Court of Québec The facts The Association générale des étudiants hors campus de l’Université du Québec à Trois-Rivières and the Association générale des étudiants de l’Université du Québec à Trois-Rivières (hereinafter, the “Associations”) have been providing supplemental health and dental insurance to their 14,000 student members since 2014. They refer to this as a self-insurance plan, which is managed through insurer Major Group Inc. The Autorité des marchés financiers (“AMF”) applied to the Court for a permanent Order of Injunction to require Major Group Inc. and the Associations to cease their insurance activities. It contended that the Associations were acting as insurers and that they cannot do so without its authorization, as provided for under section 21 of the Insurers Act (“IA”).3 Under the IA, the AMF’s authorization is required to carry on insurer activities, if such activities constitute the operation of an enterprise, regardless of any other activities that may be carried on by the operator. The AMF also claimed that the Associations were not practising self-insurance. The Associations maintained that they were not acting as insurers but engaged in self-insurance. Furthermore, they argued that section 21 of the IA cannot apply to their activities as they are non-profit organizations and therefore cannot operate a business within the meaning of the act. The Court’s grounds The Court defined the concept of a self-insurance contract under Quebec law as follows: the insured chooses not to subscribe an insurance contract for all or part of a risk, opting instead to assume the financial consequences itself, thereby not transferring the risk to a third party. The Court determined that the Associations were the policy holders, and the student members were the insured. In this sense, it cannot be considered a self-insurance contract since the risk of the student members is transferred to the Associations, which agreed to insure them in exchange for the payment of a premium. The Court then concluded that the supplemental health and dental insurance offered by the Associations constitutes insurer activities in the course of operating an enterprise, in accordance with section 21 of the IA. Even though the Associations are not-for-profit organizations, they can operate an enterprise. Furthermore, the application of section 21 of the IA does not require an analysis of the nature of the organization as a whole. The agreements between the student associations and Major Group Inc. had a pre-established economic objective, namely, to benefit from the profits that an insurer would normally make. The Associations have been offering this product for almost seven (7) years; it is, therefore, not an episodic or occasional activity. Conclusion The Superior Court of Québec granted the AMF’s application for a permanent injunction against the Associations. It issued an order to the Associations to cease, within three (3) months of the judgment, all insurance activities under the IA, and to Major Group Inc. to cease acting as a third-party administrator with respect to any self-insurance plan implemented by the Associations. *** Self-insurance can save a policyholder money on an insurance premium by providing protection on the essentials of a claim at a lower cost. However, it must be practised in accordance with the law. “Peer-to-peer” insurance: a grassroots revolution? (lavery.ca). Association générale des étudiants hors campus de l’Université du Québec à Trois-Rivières (AGÉHCUQTR) c. Autorité des marchés financiers, 2021 QCSC 5090. Insurers Act CQLR c. A-32.1.

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  • Doing Business as Usual – Prior User Rights Under Canadian Patent Law

    Prior user rights have long been recognized in Canadian patent law. These rights, which are a defence against patent infringement, are seen as a means of ensuring fairness by allowing a person who has independently manufactured, used or acquired an invention that is subsequently patented to continue using the invention. A revised version of section 56 of the Patent Act, which defines prior user rights and is similar to section 64 of the UK Patents Act, came into force on December 13, 2018. The revised provision applies to an action or proceeding commenced on or after October 29, 2018, involving a patent issued from an application filed on or after October 1, 1989. The pith and substance of prior user rights under the revised provision had never been judicially interpreted until a recent Federal Court decision was handed down in Kobold Corporation v. NCS Multistage Inc. The two corporations involved in the case supply equipment used in the oil and gas industry for hydraulic fracturing. Kobold Corporation (hereinafter Kobold, the plaintiff) alleged that four of NCS Multistage Inc.’s (hereinafter NCS, the defendant) proprietary fracturing tools infringed Canadian Patent No. 2,919,561, and NCS petitioned the Court through a motion for summary judgment to dismiss the infringement action on the basis of prior user rights. In its analysis of section 56 in its current form, the Court considered the English and French versions of the section, legislative history, Canadian jurisprudence on the previous section 56 and the corresponding legislation in the UK. The Court began by pointing out that section 56 of the Patent Act, effective since December 13, 2018, grants broader rights than the former section 56 did, underscoring the three following differences: First, it noted that the previous legislation was limited to granting “a prior user the right to use and sell” a physical product, whereas the current provision “grants a prior user the right to commit an “act” that would have otherwise constituted infringement.” It added that the word “act” must be interpreted in light of section 42 of the Patent Act, which grants exclusive rights to “making, constructing and using the invention and selling it to others to be used,” which includes patented methods. This interpretation may limit the rights of prior users, and the Court gave the example of a prior user who previously manufactured and used a device—they can continue to manufacture and use it, but they cannot rely on a prior use defence under section 56 to begin selling the device, as selling is different from manufacturing or using within the meaning of the Act.   Second, it pointed out that whereas the previous legislation “limited the protection to the sale or use of the [...] physical manifestation of the invention”, section 56 as amended protects the commission of an act “that would have constituted infringement.” Third, it pointed out that the current legislation extends protection to a person who “made serious and effective preparations to commit [...] an act” of infringement prior to the claim date, which was not the case under section 56 in its previous form. The parties had different interpretations of the term “same act” contained in subsection 56(1), particularly as to the degree of similarity required. The Court determined that the word “same” in subsection 56(1) means “identical” with respect to an act, while subsections 56(6) and 56(9) “allow a third party defence of prior use on the less stringent standard of “substantially the same.”” The Court stated that a prior user may “add to or alter” aspects that “do “not [...] infringe the patent”, for example by changing a device’s paint colour, but the prior user may not alter an aspect that relates to the invention’s inventive concept. The Court then set out the factors that must be considered in assessing the defence of prior user rights under subsection 56(1). Verbatim, it stated: First, one must determine whether the acts being performed before and after the claim date are identical [...]. If they are, then there is no need to consider infringement, as subsection 56(1) would always provide a defence to any potential infringement. Second, if the acts are not identical, one must determine whether the acts infringe the patent, and if they do, which claims. If the post-claim acts do not infringe the patent, then there is no “otherwise infringing acts” and therefore no need to rely on subsection 56(1). If the pre-claim acts do not infringe the patent, subsection 56(1) cannot apply. If the post-claim date acts infringe a particular claim of the patent that the pre-claim date acts do not, subsection 56(1) cannot apply. Finally, if the pre- and post-claim date acts are not identical but only infringe the same claims, then one must determine whether the changes relate to the inventive concept of the patent. If they do not, then subsection 56(1) will provide a defence. The Court concluded that a motion for summary judgment is only appropriate in cases where acts committed before and after the claim date are clearly identical, and thus where it is not necessary to “construe the claims [...] or conduct an infringement analysis.” In this case, given that the acts performed by NCS before and after the claim date differed, the Court concluded that a full trial was required to analyze the issue of infringement and the application of subsection 56(1) of the Patent Act.  Conclusion This first detailed analysis of section 56 of the Patent Act as amended in December 2018 has clarified several aspects of a defence against patent infringement based on prior user rights. It will certainly serve as a foundation for future decisions involving this issue. However, the application of subsection 56(1) of the Patent Act was not examined in this motion for summary judgment. We’ll have to wait for a future trial on the issue for more insight on the scope of prior user rights under Canadian law.

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  • The Supreme Court of Canada’s Decision in Prelco: The Application of Limitation of Liability Clauses in Case of a Breach of a Fundamental Obligation of a Contract

    Introduction Non-liability clauses are often included in many types of contracts. In principle, they are valid and used to limit (limitation of liability clause) or eliminate (exoneration clause) the liability of a party with respect to its obligations contained in a contract. The recent unanimous decision of the Supreme Court of Canada confirms that under Quebec law, parties may limit or exclude their liability in a contract by mutual agreement. However, a party may have such a clause declared inoperative by invoking the doctrine of breach of a fundamental obligation of the contract. In this case, the Supreme Court of Canada confirmed the validity of the clause at issue and circumscribed the limits of the application of the doctrine. The Supreme Court of Canada’s decision The facts The dispute relates to a contract signed between 6362222 Canada inc. (“Createch”), a consulting firm specializing in the improvement and implementation of integrated management systems, and Prelco inc. (“Prelco”), a manufacturing company specializing in the fabrication and transformation of flat glass. Under the terms of the contract that the parties concluded in 2008, Createch was to provide software and professional services to help Prelco implement an integrated management system. Createch prepared a draft contract and Prelco did not ask for any changes to the proposed conditions. A clause entitled Llimited Liability was included in the contract, which stipulated that Createch’s liability to Prelco for damages attributed to any cause whatsoever would be limited to amounts paid to Createch, and that Createch could not be held liable for any damages resulting from the loss of data, profits or revenues or from the use of products or for any other special, consequential or indirect damages. When the system was implemented, numerous problems arose and Prelco decided to terminate its contractual relationship with Createch. Prelco brought an action for damages against Createch for the reimbursement of an overpayment, costs incurred to restore the system, claims from its customers and loss of profits. Createch filed a cross-application for the unpaid balance for the project. At trial, the Superior Court of Québec concluded that the limitation of liability clause was inoperative under the doctrine of breach of fundamental obligation, because Createch had breached its fundamental obligation by failing to take Prelco’s operating needs into account when implementing the integrated management system. The Court of Appeal of Québec confirmed the trial judge’s decision and held that the doctrine of breach of fundamental obligation can annul the effect of an exoneration or limitation of liability clause by the mere fact that a breach relates to a fundamental obligation. The Supreme Court of Canada’s reasons The Supreme Court of Canada allowed the appeal and set aside the decisions of the lower courts. Per Chief Justice Wagner and Justice Kasirer, the Supreme Court held that the limitation of liability clause in the parties’ contract was valid, despite the fact that Createch had breached its fundamental obligation. The Supreme Court addressed the two legal bases for the existence of the doctrine of breach of fundamental obligation: the validity of the clause having regard to public order and he validity of the clause having regard to the requirement relating to the cause of the obligation. In this case, the Court determined that public order could not render the limitation of liability clause inoperative as the contract at issue was one by mutual agreement and the parties were free to share the risks associated with a contractual breach between them, even if the breach involved a fundamental obligation. As for the validity of the limitation of liability clause, the Court determined that it was not a no obligation clause that would exclude the reciprocity of obligations. Createch had significant obligations to Prelco, and Prelco could keep the integrated management system, obtain damages for unsatisfactory services and be compensated for necessary costs for specific performance by replacement, but no higher than what had been paid to Createch. A limitation of liability clause does not therefore deprive the contractual obligation of its objective cause and does not exclude all sanctions. The Court explains: “[86] Thus, art. 1371 C.C.Q. applies to contract clauses that negate or exclude all of the debtor’s obligations and, in so doing, deprive the correlative obligation of its cause. Where a contract includes such clauses, it can be said that the reciprocal nature of the contractual relationship is called into question (arts. 1371, 1378 para. 1, 1380 para. 1, 1381 para. 1 and 1458 C.C.Q.). To apply a more exacting criterion would amount to annulling or revising a contract on assessing the equivalence rather than the existence of the debtor’s prestation and, as a result, to indirectly introducing the concept of lesion, which is narrowly delimited in the Code.”1 Prelco remains bound by the limitation of liability clause in this case. The Supreme Court of Canada is of the view that the trial judge and the Court of Appeal erred in law in declaring the limitation of liability clause inoperative. It allowed Createch’s appeal. Conclusion This Supreme Court of Canada decision confirms the importance of the principles of autonomy of contracting parties and freedom of contract between sophisticated legal persons in Quebec law. The doctrine of breach of fundamental obligation does not permit the circumvention of the principle of freedom of contract: It cannot be said that an obligation is deprived of its cause when a sanction for nonperformance of obligations fundamental to the contract is provided for in a limitation of liability clause. [1] 6362222 Canada inc. v. Prelco inc., 2021 SCC 39, para. 86..

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  • Can an Idea, Style or Method Be Protected Under the Copyright Act?

    Ahead of the 2021 holiday season, as children dream about the toys that Santa Claus will bring them, let’s take a look back at a landmark decision that reviews what is copyrightable under the Copyright Act. As visual artist Claude Bouchard (“Bouchard”) learned from the outcome of her legal action against Ikea Canada (“Ikea”),1 the Copyright Act2 does not protect the ideas, styles or methods developed and used by artists to create their works, even if their work is exhibited in museums and marketed internationally. From 1994 to 2005, Bouchard sold in a Montreal’s Unicef store soft toys that she designed based on children’s drawings. In September 2014, Ikea held a drawing competition for children and made 10 soft toys from the winning entries, marketed as part of the “Sogoskatt” collection. A portion of the profits were donated to UNICEF. Originally, Bouchard was seeking a monetary award against UNICEF and Ikea for copying her toys, alleging that they had used, in particular, her idea, her original style and her methods. In 2018, the Superior Court ruled on the case for the first time, dismissing the legal action against UNICEF based on the privileges and immunities of the United Nations.3 UNICEF’s immunity from suits is in this case absolute since Bouchard’s legal action is directly related to the organization’s mission.4 In January 2021, Justice Patrick Buchholz of the Superior Court put an end to the dispute between Bouchard and Ikea, dismissing the legal action for infringement of Bouchard’s works based on the Copyright Act as being ill-founded, destined to fail and unreasonable, thus opening the door to its dismissal for abuse of process.5 Why was Bouchard’s infringement action ill-founded? The Court first examined the arguments put forward by Ikea to the effect that two essential elements giving rise to the infringement action6 could not be demonstrated by Bouchard: There is no evidence that Ikea had access to Bouchard’s work.7 There is no evidence that Ikea reproduced a substantial part of the plaintiff’s work. Therefore, Ikea argues that there was no infringement of the copyright of Bouchard, who was seeking a monopoly on an idea, style or method, which is not protected under the Copyright Act8 Lack of access to Bouchard’s works The Court did not accept Ikea’s first argument that there was a lack of access to Bouchard’s works. It ascertained that the proceedings were at a too preliminary stage to make a determination.9 The Honourable Justice Buchholz pointed out that section 51 of the Code of Civil Procedure is not [our translation] “a free pass to bypass the judicial process and prematurely set aside otherwise allowable claims” when the evidence is still incomplete.10 The Court also noted the seriousness of the links between Ikea and UNICEF, which may have made access to Bouchard’s works possible and likely.11 In this context, only a hearing on the merits could have clarified the question of access to Bouchard’s works by making it possible to test, more precisely, the credibility of the witnesses at trial.12 Lack of reproduction of a substantial part of the work Bouchard alleged that the toys designed by Ikea incorporate eight essential features of her soft toy concept, namely [our translation]: Round eyes cut from non-fraying fabrics and sewn around the edges; Thinly cut linear mouths sewn into non-fraying fabrics; iii. Polyester fibre stuffing; iv. The toy is proportionate to the size of children’s hands; v. Soft toy faithful to the child’s drawing; vi. Child’s name and age on the tag; vii. Everything is solid (head, body, legs, and tail), in the same plane and stuffed; viii.  Use of textiles, plush, and the original colours of the drawings.”13 However, the Court accepted Ikea’s second argument that Ikea’s soft toys did not reproduce a substantial part of Bouchard’s work. Since Bouchard’s works and Ikea’s works did not share a resemblance, this means that a substantial part of the works was not reproduced.14 How to determine if a “substantial part” of a work has been reproduced? Under the Copyright Act, copyright, “in relation to a work, means the sole right to produce or reproduce the work or any substantial part thereof”.15 The Supreme Court defined “substantial part” of the work in the Cinar decision,16 stating that it is a flexible notion to be interpreted based on the facts. The assessment is holistic and qualitative in nature. The criteria to be used by the courts to determine whether there has been a reproduction of a “substantial part” of a work are as follows: The originality of the work, which must be protected under the Copyright Act;17 The part “represents a substantial portion of the author’s skill and judgment”;18 The nature of the two works as a whole, without looking at isolated passages;19 “[T]he cumulative effect of the features copied from the work”.20 Although there are some similarities between the Bouchard and Ikea soft toys, the soft toys are completely different and do not look the same because they are designed from the drawings of different children. Bouchard even admitted that [our translation] “a toy made from a unique child’s drawing is in itself a unique toy”.21 Can the Copyright Act protect an idea, a concept or a body of work? Bouchard instead claimed that Ikea illegally reproduced her idea, concept, style or methods.22 She ultimately argued that Ikea did not copy a specific work, but instead copied her “work” in a broader sense.23 Bouchard’s arguments highlight issues that often come up in the court system and demonstrate a misunderstanding of what is protected by copyright. Copyright of an idea, concept, style or method In 2004, the Supreme Court pointed out that copyright protects the expression of ideas in a work and not the ideas themselves.24 Justice Buchholz rightly pointed out that an artist can be inspired by another artist without infringing the rights protected by the Copyright Act. He noted, for example, that if styles were protected, Monet could not have painted in the Impressionist style.25 The Court also noted that the soft toys made by Bouchard correspond to a generic style dictated by safety standards for the manufacture and sale of toys.26 Thus, the Copyright Act does not offer any protection for ideas, concepts, styles or manufacturing methods and techniques. Copyright of an artistic legacy, corpus, or collection The Court specified that the Copyright Act does not protect a body of work or an artistic legacy, but rather each individual work.27 Bouchard c. Ikea Canada, 2021 QCCS 1376. R.S.C. 1985, c. C-42. Bouchard c. Ikea Canada, 2018 QCCS 2690. Idem, para. 24–25. Section 51, Code of Civil Procedure, CQLR c. C-25.01. Section 2, “infringing”, Copyright Act. Bouchard c. Ikea Canada, supra, note 1, para. 16–17. Idem, para. 15. Idem, para. 34. Idem, para. 28. Idem, para. 37–39. Idem, para. 40. Idem, para. 49. Idem, para. 55. Section 3, Copyright Act. Cinar Corporation v. Robinson, 2013 SCC 73, para. 26, 35–36. Idem, para. 26. Idem. Idem, para. 35. Idem, para. 36. Bouchard c. Ikea Canada, supra, note 1, para. 53. Idem, para. 56. Idem, para. 69. CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13, para. 8. Idem, para. 67. Toys Regulations, SOR/2011-17, adopted under the Canada Consumer Product Safety Act, S.C. 2010, c. 21, s. 29, 31–32. Bouchard c. Ikea Canada, supra, note 1, para. 69–71.

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  • A False Sense of Cybersecurity?

    Ransomware has wreaked so much havoc in recent years that many people forget about other cybersecurity risks. For some, not storing personal information makes them feeling immune to hackers and cyber incidents. For others, as long as their computers are working, they do not feel exposed to no malware. Unfortunately, the reality is quite different. A new trend is emerging: malware is being released to collect confidential information, including trade secrets, and then such information is being sold to third parties or released to the public.1 The Pegasus software used to spy on journalists and political opponents around the world has been widely discussed in the media, to the point that U.S. authorities decided to include it on their trade blacklist.2 However, the use of spyware is not limited to the political sphere. Recently, a California court ordered a U.S. corporation, 24[7].ai, to pay $30 million to one of its competitors, Liveperson.3 This is because 24[7].ai installed competing technology on mutual client websites where LivePerson’s technology already is installed. Liveperson alleged in its lawsuit that 24[7].ai installed spyware that gathered confidential and proprietary information and data regarding Liveperson’s technology and client relationships. In addition, the software which 24[7].ai allegedly installed removed some features of Liveperson’s technology, including the “chat” button. In doing so, 24[7].ai interfered in the relationship between Liveperson and its clients. This legal saga is ongoing, as another trial is scheduled to take place regarding trade secrets related to a Liveperson client.4 This legal dispute illustrates that cybersecurity is not only about personal information, but also about trade secrets and even the proper functioning of business software. A number of precautions can be taken to reduce the risk of cybersecurity incidents. Robust internal policies at all levels of the business help maintain a safe framework for business operations. Combined with employee awareness of the legal and business issues surrounding cybersecurity, these policies can be important additions to IT best practices. In addition, employee awareness facilitates the adoption of best practices, including systematic investigations of performance anomalies and the use of programming methods that protect trade secrets. Moreover, it may be advisable to ensure that contracts with clients provide IT suppliers with sufficient access to conduct  the necessary monitoring for the security of both parties. Ultimately, it is important to remember that the board of directors must exercise its duty with care, diligence and skill while looking out for the best interests of the business. Directors could be held personally liable if they fail to meet their obligation to ensure that adequate measures are implemented to prevent cyber incidents or if they ignore the risks and are wilfully blind. Thus, board members must be vigilant, be trained in and aware of cybersecurity in order to integrate it into their risk management approach. In an era in which intellectual property has become a corporation’s most important asset, it goes without saying that it is essential to put in place not only the technological tools, but also the procedures and policies required to adequately protect it! Contact Lavery for advice on the legal aspects of cybersecurity. See Page, Carly, “This new Android spyware masquerades as legitimate apps,” Techcrunch, November 10, 2021. https://techcrunch.com/2021/11/10/android-spyware-legitimate-apps; Page, Carly, “FBI says ransomware groups are using private financial information to further extort victims,” Techcrunch, November 2, 2021. https://techcrunch.com/2021/11/02/fbi-ransomware-private-financial-extort. Gardner, Frank, “NSO Group: Israeli spyware company added to US trade blacklist,” BBC News, November 3, 2021. https://www.bbc.com/news/technology-59149651. Claburn, Thomas, “Spyware, trade-secret theft, and $30m in damages: How two online support partners spectacularly fell out,” The Register,June 18, 2021. https://www.theregister.com/2021/06/18/liveperson_wins_30m_trade_secret. Brittain, Blake, “LivePerson wins $30 million from [24]7.ai in trade-secret verdict,”Reuters, June 17, 2021. https://www.reuters.com/legal/transactional/liveperson-wins-30-million-247ai-trade-secret-verdict-2021-06-17.

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  • Do you know your open-source licences?

    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, 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 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.

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