Mr. Al Gala, a model/actor/poet/photographer, recently shot to global fame in connection with numerous media reports that he was ousted by authorities from Saudi Arabia for being “too handsome”.

Contact information:

For professional inquiries, please contact: Timothy W. Murphy, tel. +(604)360-7014 or by email at: tmurphy@murphyandcompany.com

This article is not legal advice and is not intended as legal advice. This article is intended to provide only general, non-specific legal information. This article is not intended to cover all the issues related to the topic discussed. The specific facts that apply to your matter may make the outcome different than would be anticipated by you. This article does not create any attorney client relationship and is not a solicitation.

Timothy W. Murphy, Managing Director of Murphy & Company was pleased to participate as the winners of the 2013 Cantech Letter Awards and Nick Waddell, Founding Editor of Cantech Letter joined Kevan Cowan, President, TSX Markets and Group Head of Equities, TMX Group to opened the market to celebrate the third annual awards. Founded in 2008, Cantech Letter is an online magazine focused on companies listed on Toronto Stock Exchange and TSX Venture Technology, Cleantech and Life Sciences Sectors. The Cantech Letter awards recognize excellence in Canadian technology stocks and are voted on by a panel of Canadian technology analyst and readers of Cantech Letter. This year’s awards will feature four categories: Canadian Tech Stock of the Year (TSX), Canadian Tech Stock of the Year (TSXV), Canadian Tech Stock Executive of the Year (TSX) and Canadian Tech Stock Executive of the Year (TSXV). The awards were hosted by the Toronto Stock Exchange and TSX Venture Exchange on January 11 at the TMX Broadcast Centre. For more information visit cantechletter.com.

To contact Murphy & Company, call (604) 360-7014 or email: tmurphy@murphyandcompany.com

This article is not legal advice and is not intended as legal advice. This article is intended to provide only general, non-specific legal information. This article is not intended to cover all the issues related to the topic discussed. The specific facts that apply to your matter may make the outcome different than would be anticipated by you. This article does not create any attorney client relationship and is not a solicitation.

On July 31, 2012, Vancouver book publisher Whitecap Books Ltd. was acquired in a share purchase by Toronto-based Fitzhenry & Whiteside Limited.

Whitecap Books and its shareholders were represented in the transaction by Timothy W. Murphy and Audrey C. Lim of Murphy & Company.

For more information, see: http://www.whitecap.ca/blog/ownership-change-whitecap-books

Timothy W. Murphy, LL.M, is a Vancouver-based business and IP lawyer.  To contact Murphy & Company, call (604) 360-7014 or email: tmurphy@murphyandcompany.ca

Excerpt from the article “Landmark Decision: Supreme Court of Canada Rejects Additional Royalty for Game Downloads“:

In a piece of good news for Canadian video game publishers and users, the Entertainment Software Association (ESA), an organization which represents the Canadian computer and video game industry, has won a landmark copyright case at the Supreme Court of Canada.

The Court, in a 5-4 decision, rejected the collection of performance royalty fees, in addition to reproduction royalty fees, for music contained in video games downloads.

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To read the full article visit: http://www.techvibes.com/blog/landmark-decision-supreme-court-of-canada-rejects-additional-royalty-for-game-downloads-2012-07-17

Timothy W. Murphy, LL.M, is a Vancouver-based business and IP lawyer.  To contact Murphy & Company, call (604) 360-7014 or email: tmurphy@murphyandcompany.ca

This article is not legal advice and is not intended as legal advice.  This article is intended to provide only general, non-specific legal information.  This article is not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This article does not create any attorney client relationship and is not a solicitation.

In particular, the court has favoured the end user in fair dealing issues and limited the rights of copyright owners to receive additional performance royalties for “communication to the public” of their works over the internet.

No Royalties for Streaming of Music Previews

In Society of Composers, Authors and Music Publishers of Canada v. Bell Canada, the court considered whether the “preview” of songs over the internet constitutes “fair dealing” under s. 29 of the Copyright Act.  The court held that the 30-90 second song previews were being provided in order to facilitate the research purposes of the consumers and, as such, are “fair dealing” with no royalties payable to the artists.

Fair Dealing in the Classroom – Photocopying Excerpts of Textbooks

In Alberta (Education) v. Canadian Copyright Licensing Agency, the issue being addressed by the court was similar to that of the Bell case.  The Supreme Court addressed whether photocopying excerpts from school textbooks and distributing the photocopies to students in class is “fair dealing”.  The court affirmed its ruling in the Bell case and described the two-step test for “fair dealing”:

“The first [step] is to determine whether the dealing is for the allowable purpose of “research or private study” under s. 29, “criticism or review” under s. 29.1, or “news reporting” under s. 29.2 of the Copyright Act.  The second step of CCH assesses whether the dealing is “fair”. The onus is on the person invoking “fair dealing” to satisfy all aspects of the test.  To assist in determining whether the dealing is “fair”, this Court set out a number of fairness factors: the purpose, character, and amount of the dealing; the existence of any alternatives to the dealing; the nature of the work; and the effect of the dealing on the work.”

The court held, as a departure from the traditional judicial interpretation of “fair dealing”, that the purpose of the ultimate user, and not just the copier, is a factor to determine fairness.  As the teachers were not seeking any commercial gain and merely aiding the students in their private research for the purpose of studying, the copying in question was held to be fair.  The court also noted that no correlation could be established between such copying and declining textbook sales.

Downloads are not “Communication to the Public”

The Supreme Court, in Entertainment Software Association v. Society of Composers, Authors and Music Publishers of Canada, has held that the delivery of a permanent copy of a video game containing a musical work is not a “communication” under s. 3(1)(f) of the Copyright Act.  In other words, no performance royalties are payable to the music creators.

The court considered whether a music creator should receive additional royalties when their work is sold, in this case as part of a video game, over the internet (as opposed to in a store). The court held that the internet is a “technological taxi” that delivers a copy of a work, much like a physical sale of a work in a store and that, as such, the music creator is not entitled to any additional royalties for the delivery of the overall work.

Royalties still In Force for On-Demand Streaming

In Rogers Communications Inc. v. Society of Composers, Authors and Music Publishers of Canada, the Supreme Court re-affirmed its position in Entertainment Software Association that “musical works are not ‘communicated’ by telecommunication when they are downloaded.”  However, the court also considered the more interesting question of whether or not “streaming” of songs (in this case, on an “on-demand” basis) over the internet may be interpreted as communications to the public.  The court held that, unlike downloading, streaming of a song is not a “private transaction” and constitutes public communication.  The result is that Rogers, and other providers of similar on-demand services, will continue to be responsible to pay royalties for on-demand streaming of works.

Timothy W. Murphy, LL.M, is a Vancouver-based business and IP lawyer.  To contact Murphy & Company, call (604) 360-7014 or email: tmurphy@murphyandcompany.ca

This article is not legal advice and is not intended as legal advice.  This article is intended to provide only general, non-specific legal information.  This article is not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This article does not create any attorney client relationship and is not a solicitation.

Basic Duties of Directors and Officers

In general, Canadian directors and officers must perform their duties: (1) in the best interests of the company, and (2) with a degree of care no less than that of a reasonably prudent person.  These obligations are reflected in federal and provincial statutes, such as the Canada Business Corporations Act.

In Peoples Department Stores Inc. (Trustee of) v. Wise, the Supreme Court of Canada described the duty to act in the best interests of the company (also referred to as the ‘duty of good faith’ or ‘fiduciary duty’):

The statutory fiduciary duty requires directors and officers to act honestly and in good faith vis-à-vis the corporation. They must respect the trust and confidence that have been reposed in them to manage the assets of the corporation in pursuit of the realization of the objects of the corporation. They must avoid conflicts of interest with the corporation. They must avoid abusing their position to gain personal benefit. They must maintain the confidentiality of information they acquire by virtue of their position. Directors and officers must serve the corporation selflessly, honestly and loyally.

This fiduciary duty can cause special problems in situations where a director has been elected as a representative of a specific shareholder, group of shareholders or other stakeholder (labour union, creditor etc.), as the director will likely be in a conflict of interest if they are in possession of information that affects the company, but do not disclose it to the board.

In carrying out their duties, directors and officers must act prudently and exercise their business judgment.  They are, to an extent, permitted to rely on advice that they receive from, in the case of directors, their officers and, for both directors and officers, their professional advisors, although they must not do so blindly.  In particular, they should: (1) for directors, attend board meetings (if possible), (2) make reasonable inquiries that a director or officer in the same position would reasonably make, (3) examine the financial statements of the company (when required to do so).

Mitigating Liability for Directors and Officers

Although there is no substitute for acting in good faith and being diligent, there are strategies and practices available to help directors and officers mitigate their personal liability, most importantly: indemnification from the company, good corporate governance practices and proper insurance coverage.

Where permitted by federal and provincial statutes, directors and officers should consider protecting themselves from personal liability with indemnities from the company.  Such indemnities may be set forth in the governing documents of the company (e.g. articles or by-laws) or in a separate agreement.  However, it should be noted that these forms of indemnity are limited by statute.  For example, it is not typically permitted for a company to indemnify a director or officer for any damages that arise as a result of actions performed in bad faith.  In addition, it may be appropriate to seek an indemnity from a principal shareholder of the company or other major stakeholder.

Good corporate governance practices are also important.  For example, keeping minutes of meetings which clearly demonstrate the decision making process of directors.  Board committees should adopt charters or guiding principles that are annually reviewed.  Legal advice should be sought by directors and officers where there are concerns that practices being followed may be insufficient or if there are specific questions with respect to conflicts of interest or the degree of care being used.

Insurance coverage is available to directors and officers for any liabilities which may arise, even those against which the company is not statutorily entitled to indemnify them.  However, insurers often limit such policies much in the same way as is the case in statute (e.g. exclusions for wilful acts, etc.).  Each such policy must be reviewed and negotiated to ensure that it appropriately covers the company (to the extent that it may be offering contractual or other indemnities), director and/or officer.  Often, directors’ and officers’ insurance is supplemental in nature to the indemnities offered by the company.

Timothy W. Murphy, LL.M, is a Vancouver-based business and IP lawyer.  To contact Murphy & Company, call (604) 360-7014 or email: tmurphy@murphyandcompany.ca

This article is not legal advice and is not intended as legal advice.  This article is intended to provide only general, non-specific legal information.  This article is not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This article does not create any attorney client relationship and is not a solicitation.

“Crowdfunding” is the practice of funding a venture by raising numerous small amounts of money from a large group of investors, typically through the use of the internet. It started with a ripple in the form of websites supporting the arts and, in a world dominated by social media, is quickly becoming a wave in other industries, particularly for start-up technology companies. Crowdfunding opens up a whole new way for individual investors to participate in the early stages of potentially great companies, but investors need to know and understand the risks involved before strapping on their surf boards and catching this wave.

…

The foregoing is an excerpt from the Cantech Letter.  To read the rest of this article, visit: http://www.cantechletter.com/2012/05/a-facebook-in-the-crowd-get-ready-for-crowdfunding-2-0/

Timothy W. Murphy, LL.M, is a Vancouver-based technology and business lawyer.  To contact Murphy & Company, call (604) 360-7014 or email: tmurphy@murphyandcompany.com.

This article is not legal advice and is not intended as legal advice.  This article is intended to provide only general, non-specific legal information.  This article is not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This article does not create any attorney client relationship and is not a solicitation.

Common Terms

• Parties.  The LOI should clearly state the identity of the purchaser(s) and the vendor(s), and whether any rights are assignable to a third party (e.g. if an individual enters into an LOI, but wishes to incorporate prior to the closing)

• Assets vs. Shares. The LOI should set out the nature and general scope of what is being bought or sold (assets or shares). For example, if it is a share sale, the number and class of shares to be purchased.

• Purchase Price.  It is standard practice to include the purchase price in the LOI.  However, in some cases, the final purchase price may be subject to change depending upon information which emerges as a result of the due diligence process. In addition, it can also be useful, when discussing purchase price, for the parties to agree whether there will be any earn-out by the vendors or post-closing consulting arrangements.

• Important dates.  To ensure the transaction progresses in a timely manner, it is prudent to propose a timeline including dates for the signing of the purchase agreement, the target closing date or other important milestones.

• Due diligence.  LOIs typically specify that the purchaser will have the opportunity, prior to the closing, to conduct appropriate due diligence.  For example, examination of financial records, corporate records, inspections, testing and appraisals of assets, etc.

• Formal Purchase Agreement.  The LOI should acknowledge that the parties will enter into a formal purchase agreement prior to the closing date which is in a form acceptable to each party’s lawyer and which contains representations, warranties, covenants and other agreements customary for the purchase of a business.

• Confidentiality.  Often, LOIs restrict public disclosure made by either party concerning the transaction without the other party’s prior written consent.

• Exclusivity.  From the purchaser’s perspective, it is useful to include an exclusivity provision in the LOI which prohibits the vendor from advertising the sale of its business or entertaining offers from other potential buyers prior to the closing.

• Deposit.  As a demonstration of good faith, vendors will often require purchasers to make a deposit towards the purchase price.  The drafting of the deposit provision is important and can have serious consequences if the transaction does not close.  For example, is the deposit refundable or non-refundable?  If it is refundable, what are the conditions upon which it can be returned to the purchaser?  Who will hold the deposit (e.g. the vendor’s lawyer or the purchaser’s lawyer)?

Binding vs. Non-Binding

There is much debate (and misconception) surrounding whether LOIs should be binding or non-binding in nature.  The answer to this question largely depends upon the level of negotiation between the parties and whether they intend to enter into a more formal purchase agreement prior to closing (which is highly recommended).  However, in practice, LOIs often contain a number of provisions which are non-binding. In addition, many LOIs will contain conditions which would allow a purchaser to abandon a transaction under certain circumstances, for example, if they are not satisfied by the results of their due diligence.

Typically, if LOIs contain any binding provisions, they will be with respect to confidentiality, exclusivity (if applicable), treatment of the deposit and governing law/jurisdiction.

For more information on letters of intent or buying/selling a business, do not hesitate to contact Murphy & Company at (604) 360-7014 or by email at: tmurphy@murphyandcompany.ca

This article is not legal advice and is not intended as legal advice.  This article is intended to provide only general, non-specific legal information.  This article is not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This article is based on British Columbia law.  You should consult with an attorney familiar with the issues and the laws of your country.  This article does not create any attorney client relationship and is not a solicitation.

Business acquisitions are typically either for a company’s “shares” or its “assets”.  Some of the differences between these two forms of purchase are discussed below.  In either case, the parties may decide to start the process by entering into a “letter of intent” or “memorandum of understanding”  in order to settle the basic terms, such as purchase price, exclusivity, deposit, confidentiality, etc.  Often these types of agreement are non-binding in nature (apart from confidentiality, exclusivity and deposit conditions).

Image courtesy of K. Kostov

Murphy & Company has successfully negotiated, on behalf of a Canadian domain name owner, the purchase of a prominent “.ca” domain name for USD $130,000.  The purchaser was a large U.S. corporation expanding its operations into Canada.

“This transaction, and the high sale price, are strong indications of a healthy .ca domain name market in Canada.  We are seeing more and more U.S. companies which are interested in acquiring .ca domain names,” stated Timothy W. Murphy, Principal of Murphy & Company, with respect to the transaction.  Due to confidentiality restrictions, the URL of the domain name in question and the identity of the parties involved cannot be disclosed.

Murphy also notes that a considerable number of such transactions begin in a contentious manner, such as a dispute over trade-mark rights, and, once the ownership and use issues are resolved, evolve into settlement negotiations with a domain name purchase component.

Timothy W. Murphy, LL.M, is a Vancouver-based technology and business lawyer.  To contact Murphy & Company, call (604) 360-7014 or email: tmurphy@murphyandcompany.ca

This article is not legal advice and is not intended as legal advice.  This article is intended to provide only general, non-specific legal information.  This article is not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This article does not create any attorney client relationship and is not a solicitation.

On January 11, Research in Motion went head to head with BBM Canada to defend against BBM Canada’s allegations of trademark infringement over the use of the mark “BBM” in connection with RIM’s BlackBerry Messenger service.

The Federal Court of Canada heard hours of legal argument from both parties and has reserved judgment pending written decisions.

BBM Canada, established as the Bureau of Broadcasting Measurement in 1944, is seeking an injunction to prevent RIM from using the BBM mark in Canada, plus $15 million in damages ($5 million of which are punitive).

Under Canadian trademark law, identical marks are entitled to co-exist, provided that such marks represent wares or services in different channels of trade. The general test is whether the average Canadian consumer would confuse one mark with the other. For example, in 2006, the Supreme Court of Canada held that there was no material likelihood of confusion between a Montreal-based restaurant called “Barbie’s” and Mattel, Inc.’s iconic “Barbie” dolls.

The primary question to be answered by the court is whether the marketplace for BlackBerry Messenger and BBM Canada overlap in any way. RIM has steadfastly held that it and BBM Canada: “…are in different industries and have never been competitors in any area. BBM Canada is attempting to obtain trademark protection for the BBM acronym that is well beyond the narrow range of the services it provides and well beyond the scope of rights afforded by Canadian trademark law.”

Generally speaking, the target markets appear to be quite different. BBM Canada is engaged in providing “broadcast measurement and consumer behaviour data to Canadian broadcasters, advertisers and agencies”. RIM has developed BlackBerry Messenger as a piece of proprietary software in its portable telecommunications devices for consumer use. However, that does not seem to have stopped consumers from being confused, as BBM Canada alleges it has received thousands of telephone calls requesting information about BlackBerry Messenger.

RIM clearly feels confident in its case, as it has not yet settled the dispute with BBM Canada. However, a settlement is still possible between the parties before the judge releases his written decisions, which should be within a matter of months. BBM Canada has indicated a willingness to change their name, for a price.

As it considers whether or not to settle, RIM must also be considering its recent legal battle over the BBX moniker for its operating system, which it now must refer to as BlackBerry 10, pending a final judgment in a separate dispute.

Timothy W. Murphy, LL.M, is a Vancouver-based technology and business lawyer.  To contact Murphy & Company, call (604) 360-7014 or email: tmurphy@murphyandcompany.ca

Vancouver lawyer Audrey Lim contributed to this article.

To read the article on the Cantech Letter, visit: http://www.cantechletter.com/2012/01/research-in-motion-can-still-win-bbm-trademark-dispute/

This article is not legal advice and is not intended as legal advice.  This article is intended to provide only general, non-specific legal information.  This article is not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This article does not create any attorney client relationship and is not a solicitation.

“Browse wrap” agreements can be differentiated from other types of “wrap” agreements, e.g. “shrink wrap” and “click wrap”.  Generally speaking, a browse wrap agreement is created: (i) when a user navigates into a website from a page containing notice of the website’s terms of use (e.g. a terms of use hyperlink and explanatory text), and (ii) the relevant terms of use indicate that they are binding on the user if they continue to use the website.  In such cases, agreement to the terms of use is indicated by a user through the act of progressing into a website.  Whereas, in shrink wrap agreements, acceptance is indicated through the act of physically removing the packaging of a product (e.g. the plastic wrapper) and, in click wrap agreements, acceptance is indicated through the act of clicking a button icon (e.g. the “I Agree” button).

In the Century 21 case, Zoocasa, a subsidiary of Rogers Communications, operated a real estate search engine that displayed property listings from a variety of other real estate websites. Zoocasa obtained listing information by accessing the content of Century 21’s website and copying listings without permission. Century 21 applied to the court for an injunction and damages against Zoocasa. Their claim was based, amongst other factors, on Century 21’s terms of use contained on its website. The terms of use prohibited commercial use of the website by users.

In holding that Century 21’s terms of use were enforceable as a browse wrap agreement, the court considered the presence of contractual elements as follows:

• Sufficient Notice.  A properly enforceable browse wrap agreement will provide the user with: (i) sufficient notice of a website’s terms of use, and (ii) the opportunity to read such terms of use prior to acceptance.

• Acceptance.  If, following notice of a website’s terms of use, a user takes a service of a website (e.g. by continuing to browse), with the knowledge that the taking of the service is deemed to indicate agreement (this must be clearly stated in the relevant terms of use), then such browsing may constitute acceptance of the browse wrap agreement.

• Consideration.  As with traditional contracts, consideration is necessary to form a browse wrap agreement.  Courts will generally find consideration in the exchange of promises.  However, the nature of the information or service contained on a website is also relevant to the presence of consideration.

• Certainty of Terms.  If a website owner unilaterally amends or removes its terms of use, without further notice to a user, the enforceability of the applicable browse wrap agreement may be called into question.  In the Century 21 case this was not an issue, as the relevant terms of use were not subsequently amended.

The Century 21 case represents an important milestone in the progression of contract law and e-commerce.  It is also a positive development for website owners and operators in Canada seeking to rely on a browse wrap agreement to protect their commercial information, provided that they have properly drafted their terms of use.

For more information on e-commerce matters, do not hesitate to contact Murphy & Company at (604) 360-7014 or by email at: tmurphy@murphyandcompany.ca

This article is not legal advice and is not intended as legal advice.  This article is intended to provide only general, non-specific legal information.  This article is not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This article is based on British Columbia law.  You should consult with an attorney familiar with the issues and the laws of your country.  This article does not create any attorney client relationship and is not a solicitation.

Here are a few of the things that I have seen go wrong with incorporating online:

Lack of an Incorporation Agreement

Pursuant to Section 15(1)(a) of the Business Corporations Act (British Columbia) (the “Act”), a “completing party” (i.e. the individual(s) that is/are filing to incorporate the company), prior to filing (online or otherwise) an incorporation application with the Registrar of Companies, is required to:

• examine the articles and incorporation agreement to ensure that both are properly signed;

• designate as incorporators in the incorporation application all those persons who have signed the articles and the incorporation agreement; and

• complete the “completing party statement” in the incorporation application.

In general, the incorporation agreement sets out the agreement on the part of the incorporator to form the company, take shares in its capital and the form of articles that will be used (in the absence of a form of articles, the statutory Form 1 articles of incorporation will apply).

In most of the cases that I have encountered, where an individual has incorporated online, no incorporation agreement has been signed.  If the completing party statement is false or misleading in a material respect, the completing party has committed an offence and is liable to a fine not to exceed $10,000.

No Shareholder or Director Meetings

Once a company has been incorporated, it must hold initial shareholder and director meetings to organize its affairs.  Typically, the first meetings are done by way of consent resolutions in writing signed by the incorporator.  For example, issuance of shares, fixing of the financial year end, appointment of officers, waiver of an auditor and adoption of any pre-incorporation contracts.  The Act provides that a company must hold its first annual general meeting not more than 18 months after the date on which it was incorporated.

Often in the case of online incorporations, such meetings or consent resolutions have not been held, which can create compliance issues and, in fact, legal issues.  A lack of organizational formalities can have a serious impact on parties in the event of a later dispute, e.g. if a party is under the belief that they have shareholder rights and, in fact, may not even be a shareholder.

No Evidence of Paid-Up Capital in Shares

Related to the lack of organizational meetings that I have noted above, are also deficiencies that can arise when shares are not properly evidenced or paid for (not to mention whether such shares have been properly issued).  For example, even if the directors of the company have held a meeting, or signed a unanimous resolution to issue shares, has the appropriate amount of consideration passed between the shareholder and the company?  Section 64(2) of the Act states that a share must not be issued until it is fully paid for by the subscriber.  In fact, directors may be held personally liable in the event that shares are issued in contravention of s. 64.

One of the things that CRA may examine in a company audit is whether the shares were fully paid-up at the time of issuance (e.g. by way of a cheque from the subscriber to the company).  If shares have not been fully paid-up, then any dividends issued in connection with such shares may be re-characterized by CRA as loans or some other form of individual benefit.  Such re-characterization can have significant tax consequences for the company and the individual(s) in question.

Lack of a Central Securities Register

Another problem that I have noticed in connection with online incorporations is the absence of a central securities register for the company.  Pursuant to Section 111 of the Act, companies must maintain a central securities register and include in it all shares of the company which are issued or transferred, together with the following information:

• the name and last known address of each person to whom the shares have been issued or transferred;

• the class, and any series, of the shares;

• the number of shares held by each person to whom the shares have been issued or transferred; and

• the date and particulars of each issue or transfer.

Conclusion

Although online incorporation is convenient, there are risks involved which incorporators should be aware of.  The foregoing list represents only a few of the risks that I have noticed with incorporating online.   There are many more, especially in situations where a company requires any sort of customized legal or tax structure.

The costs associated with reorganizing a company, which was poorly organized online, can far exceed the costs associated with receiving timely legal and financial advice at the outset of the company’s formation.

For more information on corporate matters, do not hesitate to contact Murphy & Company at (604) 360-7014 or by email at: tmurphy@murphyandcompany.ca

This article is not legal advice and is not intended as legal advice.  This article is intended to provide only general, non-specific legal information.  This article is not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This article is based on British Columbia law.  You should consult with an attorney familiar with the issues and the laws of your country.  This article does not create any attorney client relationship and is not a solicitation.

Murphy & Company is pleased to announce that it has formed an alliance with Léonar French Translation Services to offer legal translation services to its clients. “Léonar brings a unique skill set to M&C and this alliance will prove greatly beneficial to clients that require quality legal translations in the French language” says Timothy W. Murphy, principal and founder of Murphy & Company.

Léonar French Translation Services is owned and operated by Sophie Stankiewicz, LL.M (McGill), PhD (Strasbourg, France) and offers translation services between English and French for a wide variety of legal documents, such as legal agreements, pleadings, reports, press releases, securities and related documents.  Ms. Stankiewicz has a doctorate in law and is based in Vancouver, Canada.

For more information contact Murphy & Company at (604) 360-7014 or by email at: tmurphy@murphyandcompany.ca

To reach Léonar French Translation Services directly, contact Sophie Stankiewicz at (604) 970-0520 or by email at: stankiewiczsophie@yahoo.fr

This article is not legal advice and is not intended as legal advice.  This article is intended to provide only general, non-specific legal information.  This article is not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This article is based on British Columbia law.  You should consult with an attorney familiar with the issues and the laws of your country.  This article does not create any attorney client relationship and is not a solicitation.

Defining the scope of services

It is important that consultants clearly define the scope of services to be provided to a client.  All relevant services should be set forth either in the agreement itself or in a commercial schedule to the agreement.  From the perspective of a consultant, it should be a closed list of activities, based on the commercial discussions between the parties, and set forth the services that the client is expecting to receive.  The advantage of having a closed list is that it protects the consultant from being asked to perform additional services for which it may not be getting paid.  The list of services should be sufficiently detailed and, depending on the context, may include things like content creation, certain marketing activities, reporting, updates, testing, etc.  In addition, a consultant may wish to further specify that the manner and means through which it chooses to perform the services will be in its sole discretion and control.

Payment

All consulting agreements (at least for services not being provided on a pro bono basis) should include payment provisions.  In particular, the amount of fees to be charged to the client should be clearly set forth in the agreement (or a commercial schedule).  In addition to the amount of fees to be paid, the mechanism(s) of payment should be well defined.  For example, will you be taking a retainer up front for your services?  Will you be invoicing the client on a monthly basis?  Will invoices be net 30 or some other duration?  In the event of non-payment of an invoice, consultants may wish to consider the inclusion of a penalty interest provision (e.g. 1% per month, etc.).

Liability

How much liability are you willing to accept for the performance of your services?  Typically, consultants will be asked by clients to provide a representation that the performance its services will not infringe the intellectual property rights of any third party and to indemnify the client if they do.  However, consultants may wish to limit their liability to a pre-determined amount, such as the amount of fees which have been actually paid (e.g. the amount of fees paid to the consultant over the past six months, etc.).

In addition, if a consultant is using materials provided by the client to perform its services, they may wish to require a similar representation and indemnity from the client that such materials do not infringe the intellectual property rights of any third party and that the consultant will be indemnified by the client if they do.

Ownership of intellectual property

If you are creating work product (such as a logo, source code, slogan, website, etc.) for your client, it should be specified in the agreement who will be the owner of such work product.  The agreement should clearly indicate whether the relevant work product is being created as a ‘work made for hire’ and if the consultant will be required to assign and transfer its ownership rights in such work product to the client.  If the work product is to be owned by the client, the consultant may wish to consider requiring full payment of its fees prior to assigning and transferring ownership to the client.  The determination of whether ownership of work product should pass to the client often comes as a result of commercial discussions between the parties and standard practices in the relevant industry.  For example, it may be appropriate, in some circumstances, for the consultant to retain ownership of the work product and license it back to the client (e.g. in the case of photographs, music, literary works, software programs, etc.).

Governing law and jurisdiction

In the event that a dispute arises between you and your client, what will be the governing law and in what jurisdiction will the dispute be heard?  This issue is more relevant in situations where a consultant and client reside in different jurisdictions.  For example, if a consultant lives in Vancouver, British Columbia, and a client lives in Toronto, Ontario, in the absence of a provision which specifies governing law and jurisdiction, the client may be able to argue that the dispute should be governed by Ontario law and heard in a Toronto court.  Clearly, such an outcome would not favour the consultant, who may be seeking to enforce payment of its fees, etc.  Alternatively, many parties are now including mediation and arbitration clauses in their agreements, which, in some cases, can have the advantage of lower overall costs, increased confidentiality and quicker resolution of a dispute.

Conclusion

The foregoing list is only a summary of a few common mistakes which I have noticed in standard form consulting agreements and is not intended to be comprehensive.  There are a number of other issues, not included in the list above, which are also important and should be properly dealt with, such as duration of the agreement, termination rights, expenses, confidentiality, entire agreement, status as an independent contractor, etc.

Before you enter into a consulting agreement, it is advisable to seek counsel from a business lawyer with experience in such matters.

For more information with respect to consulting agreements, do not hesitate to contact Murphy & Company at (604) 360-7014 or by email at tmurphy@murphyandcompany.ca

This article is not legal advice and is not intended as legal advice.  This article is intended to provide only general, non-specific legal information.  This article is not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This article is based on British Columbia law.  You should consult with an attorney familiar with the issues and the laws of your country.  This article does not create any attorney client relationship and is not a solicitation.

Starting a new business can be a daunting task.  As a small business owner, you need to ensure that you have properly covered your bases at each phase of your business development.

To assist entrepreneurs, the government of Canada has produced a useful, interactive checklist which can be found at:

http://www.canadabusiness.ca/eng/checklist/5479/

The checklist covers the following important topics:

• Is entrepreneurship for you?
• Developing your ideas
• Developing your business plan
• Business name and registration
• Buying a business
• Forms of business organization
• Financing your business
• Choosing and setting up a location
• Checklists and guides for starting a business

As you go through the start-up process, it is also highly recommended to seek the advice of a qualified business lawyer to help you establish and grow your business.

For more information with respect to starting-up your business, do not hesitate to contact Murphy & Company at (604) 360-7014 or by email at tmurphy@murphyandcompany.ca

This article is not legal advice and is not intended as legal advice.  This article is intended to provide only general, non-specific legal information.  This article is not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This article is based on British Columbia law.  You should consult with an attorney familiar with the issues and the laws of your country.  This article does not create any attorney client relationship and is not a solicitation.

• Certified/notarized true copies of documents
• Witnessing of signatures
• Statutory declarations and affidavits

Clients are required to:

• Book an appointment in advance by email or telephone
• Bring original copies of all relevant documents which require notarization and/or certification to the meeting
• Present two pieces of government issued identification, one of which must contain a photograph (e.g. driver’s license, passport)

Please do not sign any documents required to be notarized in advance of the meeting.

We are conveniently located near the Passport Office in downtown Vancouver.

Fees are $29.00 for a notarization/certification, plus $9.00 for each subsequent page, and HST.

To add another twist, the City of Vancouver filed a trade-mark in connection with the East Van cross in 2010.  However, the copyright registration of the local businessman pre-dates the trade-mark filing by the City of Vancouver.  While the City of Vancouver apparently has no qualms with photographs being taken of a public sign (although whether this is true of photographs offered for sale may be another matter), it is worth noting that where it can be established that a component of a trade-mark contains an unauthorized reproduction of a copyrighted work, an action for copyright infringement may be available to the owner of the copyright.

So, who, if anyone, owns the intellectual property rights in the East Van cross?

Many Vancouver residents (particularly those from East Vancouver) would likely consider the East Van cross to be a culturally important image which properly belongs in the public domain.  But, the law is rarely so straightforward.  Legally speaking, the creator of a work, in the absence of a subsequent assignment or competing claim, is the copyright owner and the creator’s rights in their work generally last for their lifetime plus 50 years after death.  Apart from usage as a biker logo, the original author of the East Van cross image appears to be unknown, which raises some interesting questions about the extent to which the cross may actually be in the public domain.

The Copyright Act states that anonymous works enter the public domain 75 years after their creation, or 50 years after their first publication, whichever comes first.  For example, if the first version of the East Van cross could be proven to have been published prior to 1961 (e.g. in a magazine, etc.), then it could be reasonably considered to be in the public domain.  But, as mentioned above, there appears to be some doubt as to the identity of the author, whether they are still alive and the date of creation of the image.  In fact, the original creator of the image may still be alive, yet unaware that they have any potential copyright interest.  If the author were to step forward prior to 50 years after first publication of the image and substantively prove that they are the author, then they would regain ownership of the image and the standard rule of ‘lifetime plus 50 years after death’ could apply.

The case above is a good example, and a warning tale, of the complications which may arise from using an image assumed to be in the public domain, but is subject to competing claims of ownership.

This article is not legal advice and is not intended as legal advice.  This article is intended to provide only general, non-specific legal information.  This article is not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This article is based on British Columbia law.  You should consult with an attorney familiar with the issues and the laws of your country.  This article does not create any attorney client relationship and is not a solicitation.

In the wake of Amazon’s network failure, many news outlets have projected the crisis as a failure of cloud computing itself. One of the pillars of the cloud, at least in the eyes of the public, is reliability. It is the belief that, like the internet itself, the cloud’s decentralized structure makes it more resilient and redundant than conventional computing. In relation to this tenet of cloud faith, Amazon’s own website states: “When one node fails, millions of other nodes pick up the slack. As a result, you gain all the benefits of an always-on and self-healing infrastructure, without ever having to configure or replace hardware.”

The belief that the cloud is infallible has been significantly weakened.  Now, companies need to analyze, from a management perspective, the root cause of the Amazon service interruption and how to avoid such crises in the future.

There is no doubt that Amazon bears, and is in fact receiving, the majority of public and private censure for failing, as a result of a technical problem, to keep the relevant server facility up and running. It is also the fault of Amazon customers, however, for not mitigating their own risk. If you ask any responsible Chief Information Officer (CIO), he/she will tell you that a good disaster recovery policy is essential to ensure business continuity. For example, Bizo, a popular online marketing platform, was barely affected by the Amazon downtime due to reactive management and existing business continuity measures which it had in place. In fact, the majority of the companies that were paralyzed by the Amazon downtime were those with no business continuity plans in place or which had chosen to not pay additional fees for back-up, or parallel systems, in the cloud.

Two examples of Canadian companies, one public and one private, that have taken the message of business continuity to heart are OpenText and Bellin Treasury Services Ltd.

Based in Waterloo, OpenText, an enterprise software company, now offers a disaster recovery solution for telecommunications companies. The “Enterprise Content Management” (ECM) solution has a records management functionality which operates as a secure back-up of disaster recovery records which is accessible to specified group of customer team members and designed to make the disaster recovery process more efficient.

Based in Vancouver, Bellin Treasury Services, the North American subsidiary of a German treasury software company, offers its clientele the option to have their treasury software hosted within Bellin’s facilities. Rick Beecroft, President of Bellin Canada, says that Bellin has taken practical steps to ensure continuity of service for its customers: “In a nutshell, we hold our customer’s data in two geographically distinct data centres. Each these data centres are required to have a different risk signature.” In addition, Mr. Beecroft points out that the Amazon crisis may have been related to a lack of capacity in Amazon’s redundant arm (i.e. fail-over capacity), and that, several years ago, his company took the additional step of ensuring that the capacity of its fail-over centre is equal to its primary data centre.

Now that the cloud has lost some of its lustrous lining, companies will need to take a hard look at their disaster recovery policies. They should also review their existing SaaS agreements to determine remedies, and their enforceability, in the event of server downtime. At the end of the day, disaster recovery is more than just a legal and technical policy which gathers dust on someone’s desk, it is a pro-active attitude towards business continuity.

Timothy W. Murphy, LL.M, is a Vancouver-based technology and business lawyer.  To contact Murphy & Company, call (604) 360-7014 or email: tmurphy@murphyandcompany.ca

To read the article on the Cantech Letter, visit: http://www.cantechletter.com/2011/04/dont-blame-the-cloud-2/

This article is not legal advice and is not intended as legal advice.  This article is intended to provide only general, non-specific legal information.  This article is not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This article does not create any attorney client relationship and is not a solicitation.

For the ComputerWorld article visit: http://www.itworldcanada.com/news/how-app-makers-can-avoid-legal-pitfalls/142933

For the MobileSyrup article visit: http://mobilesyrup.com/2011/04/13/vancouver-lawyer-says-the-app-business-has-a-storm-of-litigation-gathering-on-the-horizon/