In this presentation, Brenda Pritchard of Gowlings and Jason Gordon of Winston & Strawn discuss the differences between Canadian and U.S. rules for advertising, promotions, and privacy law. Topics covered include: -Contest and sweepstakes requirements -Children’s advertising/promotions -Online privacy requirements -Environmental advertising -User-generated content -Comparative advertising

1. The Differences Between Canada
and the U.S.
in Advertising, Promotions, and
Privacy Law
Brenda Pritchard, Gowlings
Jason Gordon, Winston & Strawn LLP

2. Canadian and American Advertising Law
Canadian Advertising and Marketing laws have some
similarities and some significant differences from those
of the United States.
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3. Overview
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Cultural Differences
Copyright and Trade Mark Laws
Right of Publicity
Contests & Sweepstakes
Difficult Provincial Laws
Children’s Advertising
Privacy
Penalties
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4. Cultural Differences
Canadians are extremely literal
• Puffery is not allowed unless it amounts to hyperbole.
• “Canada’s Favourite Coffee” would need to be supported by evidence
that the brand was the number one seller in Canada.
• Clearly incredible claims such as “Faster than a
speeding bullet” may be permissible.
• Both the literal meaning and the “general impression” of an
advertisement must be accurate.
• Average consumer from Time Case – Credulous and
Inexperienced (“From Mensa to Moron”)
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5. Canadian Specific Issues
Some issues are unique to Canada:
• Use of the Canadian Flag - Need consent from
Heritage Canada
• O Canada - In the Public Domain
• Need consent from the R.C.M.P. to make any
reference to:
• “Mounties,”
• “The Royal Canadian Mounted
Police,” or
• “RCMP.”
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6. Canadian Specific Issues
Some issues are unique to Canada:
• Depiction of Canadian Coins - Need consent from the
Royal Canadian Mint.
• Depiction of Paper Currency - Requires license from
Bank of Canada.
• Exception to the Counterfeiting Prohibition - A depiction of paper
currency must be less than ¾ or greater than 1½ the length or width
or a real bank note
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7. Canadian Specific Issues
Some issues are unique to Canada:
• The terms: “New,” “Introducing,”
or “Improved,” can be used for a
full year from product launch or relaunch.
In United States
• “New” may generally be used for only 6 months after
the date a product is launched
• Excludes up to six months in test market (not more than
15% of the country)
• “Introducing” may generally be used for only 9 months
after the date a product is launched
• Standards applied by TV networks
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8. Puffery vs. Claims In the United States
• Puffery: does not require substantiation if:
• it is incapable of being proven; or
• a reasonable person would not believe or consider to
be material
• “Claim” requiring substantiation is:
• a statement which is likely to influence a consumer’s
decision (i.e., a material statement); and
• a statement that can be proved or disproved with
objective data (i.e., can be quantified or measured in
some way)
• Need to Substantiate Both Express and Implied
Claims
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9. Use of the American Flag
• Federal Statue Prohibits Depicting the Flag
(4 U.S.C. § 3)
• Misdemeanor
• Punishable by a fine not exceeding $100 or by
imprisonment for not more than thirty days, or
both, in the discretion of the court.
• This statute is rarely enforced
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10. Depiction of U.S. Currency
• Counterfeit Detection Act of 1992 (31 C.F.R.
411) permits color depiction of U.S. paper
currency if:
• Illustration is less than three-fourths or more than
one and one half in linear dimension of each part of
the item illustrated
• Illustration must be one-sided
• All files are deleted/erased after final use
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11. Intellectual Property
What to Watch Out For in Canada
• Canadian Copyright and Trade-mark law is
fundamentally similar to that of the United States…
…but there are some very important differences to be
aware of.
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12. Intellectual Property
Copyright:
• Comparative Advertising: Showing a competitor’s label
can be copyright infringement.
• Copyright assignment must be in writing – therefore,
no online assignment, such as by clicking to accept
contest rules.
• Term of copyright is the life of the author plus fifty
years.
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13. Intellectual Property
Copyright (cont’d):
• Canada has no equivalent to the Digital Millennium
Copyright Act
• A recent amendment to the Copyright Act, introduced
an exception for User-Generated Content in s.29.21(1)
• But it only applies for non-commercial purposes
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14. Copyright Law in the United States
• No registration required.
• Copyright ownership obtained upon “fixation of
a creative work in a tangible medium.” Exclusive
right to: reproduce, make derivative works,
publicly perform/display, sell or assign rights,
and to transmit or distribute.
• Cannot infringe an idea, only the “creative
expression” of an idea.
• Protection for life of the creator plus 95 years.
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15. DMCA
• DMCA: Safe Harbor Protection Under
Copyright Law With Copyright Agent
Registration and “Takedown” Procedure.
• Not available for: (1) content you create, (2)
content you know or have reason to believe is
infringing, or (3) where you have a direct
financial interest and “right and ability to
control.”
• Need takedown policy and file forms at
Copyright Office
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16. Intellectual Property
Trade-marks:
• Canadian law on the use of competitors' trade-marks
is not straightforward:
• Whether registered for wares (ie. goods) or services, case
law prohibits the use of competitors' trade-marks on
packaging or point of sale materials, but use in a print ad may
be ok
• If registered for services, use of a competitor's mark in
advertising of any kind may constitute infringement
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17. Intellectual Property
Trade-marks (cont’d)
• You need to conduct trade-mark clearance searches in
Canada.
• “Official marks” can be a road-block.
The fact that the businesses aren’t
confusingly similar is not relevant.
Canada is a different
country, and has a
different trade-mark
register.
Practice Note: You
cannot use ® if not
registered in Canada but
registered in the US.
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18. Intellectual Property
Trade-marks and Copyright
• What one can "get away with" in an editorial or on
television is not necessarily acceptable in advertising.
Freedom of Speech does not trump Copyright!
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19. U.S. Trademark Law
• No registration required.
• Infringement of a trademark occurs where there
is a “likelihood of confusion” among consumers.
• Generally only protection with the scope of
services in which the mark is being used and a
reasonable zone of expansion.
• Famous marks can be protected outside the
scope of services in which the mark is being
used.
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20. Right of Publicity
Some issues are unique to Canada:
• Use of Personalities Dead or Alive:
• Glenn Gould Case: suggests that rights of personality exist after
death for some indeterminate amount of time, affectionately termed
the time before the person is “well-dead”
• Rule of Thumb - person is potentially available for use without the
consent of the estate where a person is dead at least 50 years
• Talent Issues:
• There are three unions in Canada
• One union is specifically for French Performers (UDA)
• Can pay pension and welfare on less than full amount of contract and
no requirement that broadcast be 50%
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21. Right of Publicity in the United States
• Each state has laws prohibiting the use of a
person's: (1) name, (2) for commercial purposes,
(3) without permission.
• Some state statutes extend rights beyond death,
some up to 50 and 100 years.
• Claims may extend beyond name, can include
persona, first name, license plates, jersey or
player numbers
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22. Contests
In Canada, the Criminal Code classifies some
contests as “Illegal Lotteries”
• Must include an element of skill to avoid being
classified as an “illegal lottery”.
• Correctly answering a mathematical skill-testing question is sufficient
skill
• Remember to use the order of mathematics
85 x 15 + 102 – 12 = ?
• Past cases have concluded: “shooting a turkey from 50 yards” or
“naming the prime minister” are not a sufficient test of skill
• However, skill does not take you out of the
consideration issue.
• Dream Home Case
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23. Contests
Contests in Canada:
• Canadians call both skill contests and sweepstakes
“contests”
• Whether or not you can force a purchase depends on
the nature of the contest:
• If a prize consists of “goods, wares or merchandise” - No
• If a prize is a service or cash and the cost to enter is more than the
prize – Yes
• All instant win type
promotions should have a
“Kraft” clause (like the US)
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24. Contests
Contests in Canada:
• Contest rules must be printable “online”.
• You can’t request more personal information than needed
for contest unless the entrant provides opt-in consent.
“Personal Information” includes an e-mail address!
• The Contest Rules in Quebec make Florida and New York
look tame!
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25. Contests in Quebec
Contests in Quebec or geared to residents of
Quebec are regulated by the Régie des alcools,
des courses et des jeux
For Contests with a Total Prize Pool > $100:
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Duty must be paid – based on total prize value,
Bonds to be posted (for prize pool > $20,000),
Final reports regarding prize delivery.
Rules must be available in French
Contest advertising must be filed in
Quebec and follow the prescribed form
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26. Contests in Quebec
Contests in Quebec are regulated by the Régie
des alcools, des courses et des jeux
The contest rules must include:
• The “Régie Clause”,
• The number and value of the prizes
and a detailed description of each,
• The place, date and precise time the prize
winners will be named, (No “On or About”)
• The place, date and deadline for
claiming prizes,
• The nature of the skill-testing requirements.
Régie Clause
Any litigation respecting the
conduct or organization of a
publicity contest may be
submitted to the Régie des
alcools, des courses et des
jeux for a ruling. Any litigation
respecting the awarding of a
prize may be submitted to the
board only for the purpose of
helping the parties reach a
settlement.
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27. Sweepstakes & Contests In The United States
• Elements of an Illegal Lottery
• Prize
• Chance
• Consideration
• For a promotion to be legal, one of these
elements must be eliminated.
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28. Skill Contests v. Chance Promotions
• What constitutes "skill"?
• Outcome based on reasonable standard of skill of
targeted participants
• Skill must determine and control the final result
• Skill is the "dominant factor"
• Some states say "any chance" causes game to be
"chance" based
• Judging Criteria
• Criteria must bear reasonable relationship to contest and
must be disclosed
• Can require a purchase to enter a skill
contest in most states
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29. Special State Rules
• Registration
• Arizona: Intellectual skill contests that require a
purchase to enter
• Florida and New York: Games of chance with prizes in
excess of $5,000
• Rhode Island: Games of chance conducted by or
through retail outlets with prizes in excess of $500
• Bonding
• Florida and New York: Games of chance with prizes in
excess of $5,000
• Post of Rules and Regulations at Retail
• Florida, Massachusetts, Michigan, New York, Rhode
Island, Texas
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30. Language Restrictions on Advertising in Quebec
The Charter of French language requires that
contractual documents and commercial
advertising in Quebec be in French:
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55. Contracts pre-determined by one party, contracts containing printed
standard clauses, and the related documents, must be drawn up in French. They
may be drawn up in another language as well at the express wish of the parties.
•
58. Public signs and posters and commercial advertising must be in French.
They may also be both in French and in another language provided that French
is markedly predominant.
However, the Government may determine, by regulation, the places, cases,
conditions or circumstances where public signs and posters and commercial
advertising must be in French only, where French need not be predominant or
where such signs, posters and advertising may be in another language only.
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31. Language Restrictions on Advertising
Section 58: applies to all kinds of commercial
advertising, whether in store, on outside signs
or even on the web
• As a rule, commercial advertising has to be in French.
• It can also be in another language, provided that French is “markedly
predominant”
Advertisements on the Same Sign
Advertisements on Separate Signs
of the Same Size
The space for French must be at
least twice as big.
Signs in French have to be twice as
numerous.
The font for French must be at least
twice as big.
The font of French must be at least
as big.
Note: There is now an Office de la langue Anglais
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32. Language Restrictions on Advertising
Any printed materials used in commerce,
including any trade publications, advertising and
product displays, must be in French.
• Another language may also be present provided that
this other language is not predominant.
Section 52:
• “Catalogues, brochures, folders, commercial directories and any similar
publications must be drawn up in French.”
• This Section has been applied to websites, which also have to be offered
in French.
• The regulation allows catalogues, brochures, folders and web sites to be in
two separate versions, one in French and one in another language.
Practice Note: If you have assets in Quebec, carry on business in
Quebec, direct advertising in French or direct Quebec residents to a
website it must be equally in French!
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33. Prohibition on Advertising to Children in Quebec
Section 248
“Subject to what is provided in the regulations, no person may
make use of commercial advertising directed at persons
under thirteen years of age.”
Section 249
“To determine whether or not an advertisement is directed at
persons under thirteen years of age, account must be taken
of the context of its presentation, and in particular of
(a) the nature and intended purpose of the goods
advertised;
(b) the manner of presenting such advertisement;
(c) the time and place it is shown.”
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34. Prohibition on Advertising to Children
Sections 87-90 of the Regulation respecting
the application of the Consumer Protection Act:
• Provide exemptions to the prohibition of advertising
directed towards children
• Section 88 exempts, subject to certain conditions, ads placed in a
magazine or insert directed at children that are for sale or placed in a
publication that is for sale;
• Section 89 exempts, subject to certain conditions,
ads whose purpose is to announce a program or
show directed at children;
• Section 90 exempts, subject to certain
conditions, ads constituted by a store
window, a display, a container, a
wrapping or a label.
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35. Advertising to Children
COPPA (15 U.S.C. § 6501 et seq. and 16 C.F.R. §
312)
• Special rules for promotions targeted to children
under 13 years of age
Children’s Advertising Review Unit (CARU)
• Reviews national advertising primarily directed to
children under 12 years of age
• whether the content is intended for children
under 12
• whether the advertisement appears during, or
just before or after, a television program aired
during children’s programming
• whether the advertiser intended to direct the
advertisement primarily to children under 12
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36. Other Prohibitions in Quebec
Emphasis on a Premium
Section 232
“No merchant, manufacturer or advertiser may, by any means whatever, put
greater emphasis, in an advertisement, on a premium than on the goods or
services offered.
“Premium” means any goods, services, rebate or other benefit offered or
given at the time of the sale of goods or the performance of a service, which
may be granted or obtained immediately or in a deferred manner, from the
merchant, manufacturer or advertiser, either gratuitously or on conditions
explicitly or implicitly presented as advantageous.”
Practice Note: A contest/sweepstakes ad must be less than half
devoted to the contest/sweepstakes and the prizes.
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37. Comparative Advertising
Industry Self-Regulation:
• Advertising Standards Canada (ASC) offers a trade
dispute procedure, similar but not identical to the US
NAD process.
• It is a relatively cheap and expeditious alternative to litigation
• No guarantee of a ruling within 60 days (NAD) but usually complete
within roughly 6 to 8 weeks.
• Mandatory initial resolution meeting between parties, then hearing
before a 5 member industry panel.
• Unlike NAD, the entire process (including the fact that a complaint was
filed, the positions of the parties, and the decision) are confidential.
Exception: ASC reserves the right to “go public” if the defendant
advertiser does not comply with the ASC decision.
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38. Canadian Privacy Law
The Personal Information Protection and Electronic
Documents Act (“PIPEDA”) Regulates the collection, use, and
disclosure of personal information in the private sector.
PIPEDA:
1. States that personal information may only be collected, used or
disclosed with the knowledge and consent of the individual;
2. Limits the collection of personal information to what is necessary for
the purpose(s) stated;
3. Requires that personal information be collected by fair and lawful
means; and
4. Requires opt-in consent in certain situations, but generally allows
opt-out consent where above requirements met and not sensitive
information.
Online behavioral advertising is the same between Canada and
the US
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39. U.S. Privacy Law
• No Federal Law but FTC's Five “Fair
Information Practice Principles.” These five
principles outline the rights of Notice, Choice,
Access, Security, and Enforcement.
• Behavioral Advertising
• California requires privacy policies for
websites and mobile applications which
collect personal information and requires
certain disclosures. Requires additional
disclosures for websites which share
personal information.
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40. Misleading Comparative Advertising
Competition Bureau Enforcement:
• The misleading advertising prohibition is enforced
via either a civil or criminal “track”.
Civil Penalties:
• Individuals – first offence: $750K; subsequent offence: $1 Million
• Corporations – first offence: $10 Million; subsequent offence: $15 Million
Criminal:
• Maximum term of imprisonment 14 years.
Other Remedies:
• In addition to cease and desist orders and corrective advertising, the
Bureau may now seek a restitution order, and/or an injunction to freeze
assets.
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41. Recent Major False Advertising Award
Bell Consent Agreement
• Bell entered a consent agreement with the Competition Bureau
for $10 million dollars over misleading advertisements
• Many of Bell's services (wireless, home phone, internet, satellite
TV) were not available at the prices advertised because of
additional, mandatory fees
• Small, “hidden” disclaimers did not save advertisements since
they contradicted the main message according the Competition
Bureau
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42. Recent Major False Advertising Award
Richard v Time
• Headline statements made in direct mailing
indicated Richard had won $833,337
• Small print qualified it by saying that these
headlines are what they would announce if he
entered and happened to be the winner
• Supreme Court of Canada found these
misleading
• $16,000 in damages
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43. Recent Major False Advertising Award
NIVEA My Silhouette
• NIVEA entered a consent agreement with the
Competition Bureau for $80,000 and a
retraction of claims
• Advertising had suggested that regular use of
the product slims and reshapes the body,
causing a reduction of up to three centimeters
on targeted areas
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44. What’s the Worst Thing That Can Happen
• Pull/Modify Expensive Advertising
• But …
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45. Pulling the Ad Is Not the Worst Thing…
• Could Also be Assessed
• Monetary Penalties
• Fine
• Damages
• Profits
• FTC Consent Order/State Attorney General Settlement
• Corrective Advertising
• Criminal Penalties
• Waste of Time and Money
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46. Recent Major False Advertising Award
• Reebok pays $25 million in Customer
Refunds following FTC settlement.
• Allegedly false claims made in connection
with EasyTone & RunTone “toning shoes.”
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47. Recent Major False Advertising Award
• Dannon settled class action for $45 million.
• Allegedly false health claims regarding Activa
and DanActive.
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48. Thank You
Brenda Pritchard, Partner
Tel: 416-862-5716
Email: brenda.pritchard@gowlings.com
Jason Gordon, Associate
Tel: 312-558-6145
Email: jwgordon@winston.com
montréal
ottawa
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waterloo region
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