Small Claims Sunday #5

Apologies for the hiatus. I have been unusually busy the last month due to starting an internship. I might only have time to cover one decision every Sunday for now.

Membrane de PVC Duradek Québec inc. c. Lévesque, 2012 QCCQ 12094 (payment for construction work)
Plaintiff is suing for payment of the balance on a sales & installation contract of membranes to cover 3 “galeries”. The contract was concluded in May 2011, and Defendant paid $2015,90 deposit. However, by July 2011, only 2 of the 3 “galeries” were completed. Plaintiff refused to finish the work until a second instalment was paid. Defendant contests the amount, and claims Plaintiff did not have the proper construction registrations.
Result: The Court had to answer many questions before reaching a verdict:
Is the contract valid?
Articles 46 and 50 of the Loi sur le bâtiment state that constructors must be registered, and a contract with a non-registered constructor may be nullified.

46. Nul ne peut exercer les fonctions d’entrepreneur de construction, en prendre le titre, ni donner lieu de croire qu’il est entrepreneur de construction, s’il n’est titulaire d’une licence en vigueur à cette fin.

Aucun entrepreneur ne peut utiliser, pour l’exécution de travaux de construction, les services d’un autre entrepreneur qui n’est pas titulaire d’une licence à cette fin.

50. La personne qui n’est pas elle-même un entrepreneur qui a conclu un contrat pour l’exécution de travaux de construction avec un entrepreneur qui n’est pas titulaire de la licence appropriée peut en demander l’annulation. […]

However, the court did not consider the installation of the membrane to be “construction work”, and declined to apply the principles above.

When does the work have to be paid?
2111 CCQ states the client does not have to pay until the work is delivered; so did the Defendant’s contract. Plaintiff was wrong in asking Defendant to pay before the work was completed.

Given the behaviour of the parties, should the contract be terminated (résilié)?

1604. Where the creditor does not avail himself of the right to force the specific performance of the contractual obligation of the debtor in cases which admit of it, he is entitled either to the resolution of the contract, or to its resiliation in the case of a contract of successive performance. […]

Yes. The Court will not order the complete cancellation of the contract, as substantial work has been done, but only resiliation, which is valid for the future.

Amount owed to Plaintiff
Duradek claims: $4 064.51
Court deducts: $750 for corrective work defendant will have to have done.
Court deducts: $2 015.90 for the deposit
Court adds: $604.20 for the third membrane specifically ordered for the job.

Amount owed to Defendant
Court awarded $500 to compensate for loss of profit from the sale of the building.
Court also awarded $600 for inconveniences to Defendant, including having to find a new contractor to correct the work, having to answer to the buyer about the work, and hassles dealing with Plaintiff.

Since when are interests owed?
For Plaintiffs, from the date the action was filed at court, given the lack of formal notice.
For Defendants, from the date the counter-claim was filed.

Snapshot of US patent landscape: Intellectual Venture’s Shell Companies

A while ago, I came across a Malcolm Gladwell article on insight and innovation, which mentioned a company called Intellectual Ventures.

In 1999, when Nathan Myhrvold left Microsoft and struck out on his own, he set himself an unusual goal. He wanted to see whether the kind of insight that leads to invention could be engineered. He formed a company called Intellectual Ventures. He raised hundreds of millions of dollars. He hired the smartest people he knew. It was not a venture-capital firm. Venture capitalists fund insights—that is, they let the magical process that generates new ideas take its course, and then they jump in. Myhrvold wanted to make insights—to come up with ideas, patent them, and then license them to interested companies.

Intellectual Ventures sounded like a company of the new millennium: first-rate minds brought together, given free reign over where they were going. Jump-starting innovation. Leading the way to the bright technological future.

It turns out, IV is more like an arch-villain’s lab. Its main business model is essentially patent trolling, and thanks to the complexities of the modern world, it does so through shell companies.

For years, IV itself liked to say that it wasn’t involved in any patent litigation directly (that changed not so long ago), but we had seen some IV patents showing up from some small patent trolls, where it was impossible to determine who actually controlled the patent or the lawsuits. However, at times, other companies have argued that the shell lawsuits were really IV in disguise. (Techdirt: Intellectual Ventures: Don’t Mind Our 2000 Shell Companies, That’s Totally Normal)

There has been some speculation as to how many shell companies IV had. Well, PlainSite has dug through the data from the USPTO and compiled a list of companies with ties to Intellectual Ventures.

We combed through 15GB of this data and linked up every patent assignment with the PlainSite entity, law firm and attorney databases to create an improved version of the USPTO assignment database, which we’ve made available for free. Then we tagged all of the companies that have links to attorneys and mailing addresses frequently used by Intellectual Ventures. The resulting list is about 2,000 companies.

IV, of course, sees nothing wrong with the practice, but one is to wonder whether a company doing honest R&D would really need 2000 aliases.

Brace yourselves, copyright shakedowns are coming!

News have been going around lately that Voltage Pictures is targeting thousands of IP addresses belonging to TekSavvy users for alleged copyright enforcement. Voltage is seeking a court order to force TekSavvy to disclose the identities of the users behind these IP addresses.

Unfortunately, TekSavvy has so far refused to oppose the motion, as opposed to the ISPs targeted last time someone tried to get a similar motion.

Everybody should know though that we have looked into all angles to determine what our position should be in this situation and after spending a significant amount of time and soliciting a considerable amount of advice from numerous respected sources, we found that we simply could not comment on the merits of the case. Our place is to ensure that we provide adequate notice and also to make known to others that these requests have occurred and that the best way to make sure to avoid being involved is to simply not engage in such activities. If somehow you end up involved and you feel its not right, the place to voice your concern is the hearing on Monday. If you intend to appear, please let us know also.

Now, I don’t think this is a particularly good response, although I see where this is coming from. You have here an independent ISP whose position in the market is catering to tech-savvy people. One might suppose that a larger proportion of its users engage in file sharing, compared to other mainstream ISPs. It would then be understandable that TekSavvy feels it needs to take position against illegal filesharing, as opposed to fighting for its users, so as to not seem like it condones the activities of its users.

That being said, I do think this position is misguided. TekSavvy doesn’t have to comment on the merits of the case. Last time around, in 2005, a similar disclosure request was rejected by the Court after the ISPs fought for their users. Ultimately, the argument retained by the Court was one of privacy: there had been too much time elapsed between the moment the rightholders obtained the IP addresses and the moment it asked for disclosure.

[43]If there is a lengthy delay between the time the request for the identities is made by the plaintiffs and the time the plaintiffs collect their information, there is a risk that the information as to identity may be inaccurate. Apparently this is because an IP address may not be associated with the same individual for long periods of time. Therefore it is possible that the privacy rights of innocent persons would be infringed and legal proceedings against such persons would be without justification. Thus the greatest care should be taken to avoid delay between the investigation and the request for information. Failure to take such care might well justify a court in refusing to make a disclosure order.

Apart from that, the Federal Court of Appeals pretty much overruled the other arguments of the lower court, which were based on the actual substance, or merits of the case.

The current case is set to resume in January, so one can hope that there is enough pressure for TekSavvy to reconsider its position. Ultimately, it is up to the company to look at the facts of the case and make a good legal and PR decision.