Canadian Compliance Essentials: What U.S. companies coming to Canada need to know about advertising, competition & privacy law

1. Canadian Compliance
Essentials
What U.S. companies coming to Canada need to know
about advertising, competition & privacy law

2. Topics include
1. Trade-mark protection
2. Québec-specific laws
3. Employment and labour issues
4. Contests and promotions
5. Time on sale and pricing practices
6. Misleading advertising
7. Competition Bureau enforcement priorities
8. Comparative advertising
9. Social media
10. Canada’s new anti-spam legislation (CASL)
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3. Gowlings at a glance
• One of Canada’s largest
law firms
• Over 750 professionals
across 10 offices
worldwide
• Recognized expertise in
business law, advocacy
and intellectual property
law
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4. Gowlings at a glance
www.gowlings.com
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5. Canadian Compliance Essentials
• Canada and the US have a lot in common but have
two distinct legal systems
• Today’s webinar will highlight some of the
similarities and significant differences between the
two legal systems
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6. 1. Trade-mark registration
• Why register your mark?
• By virtue of using your trade-mark you can generate
rights; however, these are limited in geographic scope
• Registration gives you the exclusive right to use the mark
across Canada in association with the products and
services listed in the registration
• Applying for a trade-mark provides public notice of your
intention to adopt the mark on a searchable public
database (free deterrent system)
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7. 1. Trade-mark registration
• When should you consider a Canadian trade-mark?
• As early as possible
• Consider the Canadian market in conjunction with the
U.S.
• You can apply to register the mark on an “intent to use”
basis
• Be wary of clever Canadians that may apply for the mark
in Canada before you think about the Canadian market
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8. 1. Trade-mark registration
• Advantages of applying for a trade-mark
• Some “free enforcement” at the Trade-marks Office level
• Public searchable database
• Examiners will block confusing trade-mark applications
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9. 2. Québec-specific laws
• Packaging and labelling
• Every inscription on the product or on materials (e.g.
label, tag, warranty, etc.) must have equally prominent
French and English
• Commercial advertising in Québec must use French
language in a 2:1 ratio
• Catalogues, brochures, folders, commercial directories
and any similar publications must be drawn up in French,
subject to certain exceptions
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10. 2. Québec-specific laws
• Trade-mark exceptions
• The Charter of the French language specifically exempts
“recognized trade-marks” from the requirement to
translate into French
• The enforcement office currently takes the position that the
marks must be registered to benefit from exemption
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11. 3. Employment and labour issues
• Main differences between the U.S. and Canada
• In Canada, we do not have the concept of employment “at
will”
• Employment law is a provincial responsibility, except for
employees working in a federally regulated industry
(approx. 10% of Canadian workforce)
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12. 4. Contests and promotions
• What you need to know about running contests
• Voting is susceptible to cheating – you need safeguards
• Problems with “instant win” – alphanumeric codes can be
broken
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13. 4. Contests and promotions
• Peculiarities about Canadian contest law
• In Canada, you are required to have an element of skill in
a contest
• Specific disclosure requirements under the Competition
Act requiring that you disclose in your advertising regional
allocation of prizes, retail value, etc.
• Québec: Contests must be filed in advance, pay a duty
and potentially post a security bond
• French Charter requirements
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14. 5. Time on sale and pricing practices
• Amendments to Competition Act in 2009 – Canada
moved from having some of the strictest criminal
provisions dealing with pricing practices to among
the most liberal regimes in the world
• Price discrimination and predatory pricing will only be
problematic where engaged in by a dominant firm or
group of firms with anti-competitive intent, and where
that conduct is likely to substantially lessen or
prevent competition in the relevant market
• May still attract significant administrative monetary
penalties (AMPs) – up to $10 million for a first
offence and up to $15 million for repeat offences
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15. 5. Time on sale and pricing practices
• RPM (resale price maintenance)
• Unless the producer or supplier has a degree of market power,
is not acting unilaterally and/or is causing an adverse effect on
competition from imposing a minimum resale price, RPM is ok
under Canadian law
• A producer or supplier of a product who does not have
a degree of market power and is acting unilaterally can:
• Tell retailers and other resellers “you will put your prices up or
we will stop supplying you”
• Tell retailers and resellers they have to advertise a particular
price; that they can’t discount; and that they can’t advertise a
discount
...as long as there is no adverse effect on competition
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16. 5. Time on sale and pricing practices
• No AMPs for RPM unless the test for abuse of
dominance is also met
• Remedy = an order prohibiting the producer or supplier
from continuing to engage in that conduct
• Except for the largest producers and suppliers,
there is now far more latitude and flexibility in
structuring and implementing vertical pricing
practices in Canada
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17. 5. Time on sale and pricing practices
• Advertising a sale
• Ensure you have a comparison with the ordinary selling
price
• You must have sold your goods at this price for the majority
of the time the product has been sold or have sold the
majority of the volume at this price
• Ensure your sale does not run for more than 90
consecutive days
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18. 6. Misleading advertising
• Competition Act and how it works
• The federal Competition Act is the primary statute
regulating advertising and marketing practices in Canada
• Designed to regulate activity that may have anti-
competitive effect, such as mergers, collusive behavior,
price-fixing and misleading advertising
• Advertising and marketing practices regulated on dual-
track basis – criminal / civil misleading advertising regime
• The core of both tracks is the same – prohibition against
making a representation to the public that is false or
misleading
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19. 6. Misleading advertising
• Criminal
• Typically reserved for egregious cases such as fraud
• Includes a general provision that prohibits materially false
or misleading representations made knowingly or
recklessly
• Potential penalties include fines in discretion of court and
up to 14 years imprisonment
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20. 6. Misleading advertising
• Civil
• No requirement that conduct was engaged in “knowingly
or recklessly”
• Penalties include an AMP of up to $10 million for a first
violation, and up to $15 million for any subsequent
violation
• Other potential remedies include corrective advertising,
prohibition orders and restitution to consumers
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21. 7. Competition Bureau enforcement priorities
• Increased enforcement in recent years
• The Bureau has placed considerable emphasis on
enforcement of the misleading advertising provisions in
recent years
• Follows dramatic increase in 2009 in severity of penalties
for both criminal and civil misleading advertising
• Shift in focus from criminal cases involving fraudulent
advertising schemes to high-profile civil cases involving
mass marketing
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22. 7. Competition Bureau enforcement priorities
• The Bureau’s practical enforcement priorities
include:
• False or misleading online testimonials
• False or misleading disclaimers
• Unsubstantiated performance claims
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23. 8. Comparative advertising
• Key things to remember
• Always substantiate your claims!
• Claims regarding performance, efficacy or length of life of
product require adequate and proper testing prior to
making the claim
• Advertising Standards Canada (ASC) – self regulatory
body that administers the “Canadian Code of Advertising
Standards”
• Alternative to costly court processes
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24. 8. Comparative advertising
• Copyright Act
• Prohibits the reproduction of a substantial part of another
party’s protected work
• Can include artistic works such as logos and packaging
designs
• The Copyright Act allows the plaintiff to pursue you for
damages or an accounting of profits; statutory damages
available as well
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25. 8. Comparative advertising
• Trade-marks Act
• Section 7(a): No person shall make a false or misleading
statement tending to discredit the business, wares or
services of a competitor
• Applies to registered and unregistered trade-marks
• Section 22: No person shall use a trade-mark registered
by another person in a manner that is likely to have the
effect of depreciating the value of the goodwill attaching to
that mark
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26. 9. Social media
• Privacy
• Canada’s federal privacy statute (Personal Information
Protection and Electronic Documents Act or PIPEDA)
requires consent from an individual before you can
collect, use or disclose an individual’s personal
information (which includes email addresses)
• Intellectual property
• Canadian copyright law does not have a “safe harbour”
provision, so you need to include a UGC posting policy
and moderate vigilantly
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27. 10. Canada’s new anti-spam laws (CASL)
• Expected to come into force in 2014
• Could lead to a significant increase in the number
and importance of individual and class action
privacy cases in Canada
• Will prohibit sending commercial electronic
messages, unless the sender has the prior express
or implied consent of the recipient
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28. 10. Canada’s new anti-spam laws (CASL)
• Important differences between CASL & CANSPAM
• CASL applies to more than email messages
• CASL will be an “opt-in” consent regime, while CANSPAM
is “opt-out”
• CASL will set higher maximum penalties for violations
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29. 10. Canada’s new anti-spam laws (CASL)
• Key points from a privacy litigation perspective
• Will create administrative monetary penalties and a
private right of action in respect of unsolicited commercial
electronic messages
• AMPs as high as $1 million (individuals) and $10 million
(corporations)
• Compensation in an amount equal to the actual loss or
damage suffered and statutory damages of up to $1 million
for each day on which a contravention occurred
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30. 10. Canada’s new anti-spam laws (CASL)
• Key points from a litigation perspective (cont’d)
• CASL will also extend the private right of action for
compensatory and statutory damages to breaches of
PIPEDA
• CASL will add both civil and criminal provisions to the
Competition Act with severe penalties
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31. To view our webinar titled:
Canadian Privacy and
New Anti-spam Laws:
What You Need to Know to Comply
Click on the link in the resources tab
of the webinar portal
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32. Q&A
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33. Thank You
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