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What’s “Trending Now” in Digital Advertising & Marketing Law

Agenda

Welcome Remarks

Michael Slan, Managing Partner

CASL Compliance – Upgrading Consents for CEMs before July 1, 2017

Colleen Spring Zimmerman

CASL Compliance – Software Installations

Ravi Shukla

CASL - Getting Ready for the Private Right of Action on July 1, 2017 Young Park

Contests on Social Media – Preparing Winning Rules and Ads

Yadira Flores

Protecting Trademark Rights in Digital Advertising – Online Trade-marks in Metatags, Hashtags, Keywords and Domain Names


Effective Online Disclaimers – Making Fine Print Enforceable

Bill Hearn

Digital Native Advertising – Distinguishing Advertising from Editorial Content

Bill Hearn

Advertising and Phone Apps Corporate Trainers and Post-Secondary Education

Harris Rosen

Online Influencers and Reviews – Disclosing Material Connections

Ashlee Froese

How the US FTC Regulates Digital Native Advertising and Online Influencers – Lessons for Canadian Advertisers

Allison Fitzpatrick

Q&A

http://foglers.com/lawyers/michael-s-slan-

http://foglers.com/lawyers/colleen-spring-zimmerman

http://foglers.com/lawyers/ravi-shukla

http://foglers.com/lawyers/young-park

http://foglers.com/lawyers/yadira-flores


http://foglers.com/lawyers/bill-hearn


http://foglers.com/lawyers/harris-rosen

http://foglers.com/lawyers/ashlee-froese

http://www.dglaw.com/attorney-profile.cfm?id=38#.WLiB5U0zXcs

www.foglers.com

http://foglers.com/expertise-and-industry/see-practice-areas/advertising-and-marketing

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Welcome and Introduction


Toronto, February 28, 2017

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Digital Advertising & Marketing

• CASL

• CEMs – Upgrading Consents before July 1, 2017

• Installing Software

• Private Right of Action after July 1, 2017

• Social Media Contests

• Protecting IP Rights

Agenda

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• Online Disclaimers

• Native Advertising

• Phone App Ads for PCCs

• Online Influencers & Reviews

• US FTC on Native Advertising and Online Influencers

• Allison Fitzpatrick at D&G in NYC

Agenda

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• “Six-Minute Lawyer” Format for Presentations

• Q&A (at end of all presentations)

• Reception and Informal Q&A

Agenda

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• For speaker’s online biographies, see link in speaker’s nameon agenda for seminar

• Handouts will include slide decks and one page summaries ofkey takeaways in searchable pdf

Speaker Bios/Handouts

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• Free WiFi

• Seminar Evaluation

• Express Consent for FR CEMs

Housekeeping

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CASL Compliance – Upgrading Consents for CEMs Before July 1, 2017

Colleen Spring Zimmerman, Partner, Fogler Rubinoff LLPWhat’s “Trending Now” in Digital Advertising & Marketing Law


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I. Main Topic

II. Overview of CASL - Refresher

III. Consents

IV. Enforcement Mechanisms

I. Private Right of Action

V. CASL Enforcement Efforts

I. Blackstone Learning

VI. Existing Relationships

VII. Contact Management Databases

VIII.Where are We – until July 1, 2017

IX. As of July 1, 2017

Agenda

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I – Main Topic

• Implied Consent.

• Transition Period Expiration:

• July 1, 2017

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I – Main Topic

• Count Down to July 1, 2017 (since July 1, 2014):

• CASL transition period ending.

• Provides flexibility (grandfathering;

• Satisfies the implied consent rule;

• 3 year window to:

− Obtain express consent; or

− Ensure compliance with other consent exceptionsor implied consent rules.

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• All commercial electronic message (“CEMs”):• A “commercial electronic message” is an electronic

message that, having regard to the content of the message,has as its purpose, to encourage participation in acommercial activity.

• Not apply to non-commercial activity, voice, faxor broadcast messaging, including tweets orposts.

• Applies to email, instant messaging, etc.

II – Overview of CASL - Refresher

• Sending CEMs need:

• Consent (express or implied);

• Compliance with mandatedcontent/unsubscribe information;

• Unless the CEM falls within one of theexemptions.

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II – Overview of CASL

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III – Consent - CASL is a Consent Based Program

• Need consent of the Recipient of the CEMbefore you can send the CEM.

• Sending a CEM to obtain consent would be inviolation of CASL.

• You have the onus to show that you had consent,either express or implied, for the Recipientbefore you sent the CEM to that Recipient.

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III – Consent - CASL is a Consent Based Program

• For Express Consent, the Consent must:

• Be clear that the consent is being given;

• Include your contact information, including your email address,mailing address, telephone number and the website address;

• Be opt-in i.e. the Recipient has taken an active step to consent;

• State that the consent can be withdrawn;

• Not to be bundled with other terms and conditions;

• State the purpose for the Consent; and

• Be clear and simple.

• Pre-checked boxes on forms, websites, etc. are not sufficient proofof consent under CASL.

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III - Consent

• Express consent:

• In writing

• Orally

• Purpose

• Term of the consent

• Documented – CM Database

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III - Consent

• Implied consent:

• Recipient sends his/her email address;

• Recipient’s email address is published;

• Business cards;

• Enquiry from Recipient about your business – certainrules.

• Existing business relationship – and 2 years thereafter.

• Transition Period – implied consent.

• Subject to caveats – role, function, duties or business – seefor example Blackstone Learning.

• Documented – CM Database.

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• Private Right of Actions and reduced implied consent

• July 1, 2017

• End of 3 year transition period.

• Impact – Million Dollar Exposure

• Analyze databases

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IV – Enforcement Mechanism

IV – Enforcement Mechanisms• Private Right of Action – added:

• Before the Courts:− Against those who contravene CASL;− By any person or organization.

• July 1, 2017 entry into force of this provision.

• Only in respect of actions after July 1, 2017?

• Actual and statutory damages (issue if an undertaking inforce or a Notice of Violation has been served).

• Class Actions.

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IV – CASL Enforcement Efforts

• Blackstone Learning Corp. – October 26, 2016 – CRTC Decision:

• Sending 385,668 CEMs without consent;

• Advertised educational and training services;

• Targeted primarily to government employees;

• 9 messaging campaigns;

• Violations occurred between July and December, 2014 (note date);

• Blackstone Learning argued implied consent (allegedly withguidance provided by the government).

• CRTC Witnesses:

a) Unsolicited CEMs;

b) No previous relationship with Blackstone Learning; and

c) Never consented therefore no express consent.

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• Implied consent argued by Blackstone Learning –conspicuous publication exemption, based on emailaddresses publically available.

• For implied consent – the CEM must be relevant to theRecipient’s business, role, functions or duties in abusiness or official capacity.

• Higher standard than public availability of electronicaddresses.

• Only then, infer implied consent to receive CEM.

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• Held: CEMs sent without consent.

• Notice of violation set out an AMP of $640,000.

• Total penalty of $50,000 imposed (to be paid byNovember 25, 2016).

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VI – Existing Relationship – July 1, 2017

• If, on July 1, 2014, it was evident that you had an existingrelationship with a Recipient which included the sending of CEMs,you can continue to send CEMs in respect of that relationship, for aperiod of three (3) years after July 1, 2014. This is not limited torelationships where the Recipient or his/her company receivedservices or otherwise paid money. It includes any type ofrelationship.

• For this exemption to apply, the relationship must have been inplace on July 1, 2014. The exemption then applies for three (3)years.

• During this time, you should endeavor to obtain express writtenconsent from the Recipient or confirm that the implied consent rulesapply and update your CM Database.

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VII – Contact Management (CM) Database

• Existing relationship on July 1, 2014.

• What was that relationship.

• How can you substantiate that.

• Different categories of Recipients of CEMs.

• Different CASL rules for each category.

• Highest standard – express consent for all Recipients:

• Is this feasible

• Or, need to show implied consent.

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VIII – CM Databases

• The Database must show:

• Express or implied consent;

• How you obtained consent;

• Whether the consent was obtained orally (which should bedocumented by you) or in writing;

• The date the consent was obtained;

• The purpose for the consent;

• The manner in which it was obtained; and

• Whether it has been withdrawn.

• Unsubscribe option

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VIII – Where Are We – Until July 1, 2017

• Analyze all existing contacts in database:

• Existing or potential clients on July 1, 2014;

• Current existing business relationships or within past2 years?

• Understand how you obtained each contact on thislist – other than existing clients (networking,business trips, business cards, seminars/webinars,client events, referrals, newsletter/online sign ups,meetings?);

• Not enough to be sending CEM’s and Recipient hasnot unsubscribed.

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• How did the organization develop additional contacts afterJuly 1, 2014:

• Networking, business trips, business cards,seminars/webinars, client events, referrals,newsletter/online sign ups, meetings?

• How added to database.

• Implied Consents:

Does the Recipientcomply and for whatCEMs or business.

• Audit regularly.

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VIII – Where Are We – by July 1, 2017

• CEMs:

• Send CEMs:

– for express consent;

– To up the response level – Incentives to respond.

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VIII – Where Are We – by July 1, 2017

• Categorize your database:

• Those contacts with express consent;

• Those contacts with implied consent;

• Appropriate records for all contacts;

• Not simply that the Recipient has not unsubscribed.

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• Cull your database:

• Identify those contacts to whom CEMs cannot besent – after July 1, 2017;

• But, may want to continue to pursue consent (but notby sending CEMs) – after July 1, 2017:

− Phone calls – one on one

− Faxes

− Mail

− Referrals – see procedure

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IX– As of July 1, 2017

• As of July 1, 2017:

• Full compliance with CASL;

• If not, a significant business risk.

• Corporate Compliance Guidelines:

• Documented, implemented and effective Corporate compliancepolicies and programs needed;

• Risk-management strategy;

• Involve Senior Management;

• Record keeping – essential;

• Reduce the likelihood of violating CASL;

• Establish a due diligence defence in the case of a violation ofCASL;

• Audit regularly.

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DISCLAIMER: This presentation contains general information only and does not constitute legal advice. Qualified legal counsel should be consulted to assess the application of laws to specific facts.

CASL Compliance – Upgrading Consents for CEMs before July 1, 2017

by Colleen Spring Zimmerman, February 28, 2017 [email protected]

KEY TAKEAWAYS

Starting July 1, 2017, Senders of a CEM (commercial electronic message – which include emails and instant messages) may be further exposed to large AMPs and to civil litigation if they do not have the consent of Recipients prior to sending the CEMs – expiration of the transition period (see below)

Transition Period The certain implied consent transition rule is expiring on July 1, 2017 As well, Private Right of Action commencing on July 1, 2017

What is Consent? Consent of a Recipient must be in place before a CEM can be sent

The onus is on the Sender to show that it has the express or implied consent of the Recipient before sending the CEM

For a Sender to have the express consent from a Recipient, the consent must meet certain criteria including: Be opt-in (i.e. the Recipient has taken an active step to consent); and State that the consent can be withdrawn;

Examples of where a Sender may have the implied consent of a Recipient include: Recipient sends his/her email address to the Sender; Recipient’s email address is published; Sender receives the business card of the Recipient; The Recipient enquires about the Sender's business (however there are certain rules to keep in

mind); CEM is relevant to Recipient's business, role, functions or duties in a business or official capacity

(however this should be interpreted narrowly); During the CASL transition period (July 1, 2014 to July 1, 2017) for certain CEMs; or The Sender has an existing business relationship with the recipient (and 2 years thereafter)

Blackstone Learning – October 26, 2016 CRTC Decision Deals with conspicuous publication of the Recipient's email address. The CEM as sent must be relevant to

the Recipient's business, role, functions or duties in a business or official capacity The email address must be published in such a manner that it is reasonable to infer consent to receive the

type of message sent, in the circumstances Held: CEMs sent without consent – AMP imposed

Comply with CASL by July 1, 2017 Prior to July 1, 2017, endeavor to obtain express written consent from Recipients (TIP: provide an incentive

to the Recipients to increase response levels) Confirm that the implied consent rules apply to your Recipients of CEMs Update and organize your CM Database – clearly indicate how the Recipient became a contact, what type of

consent you have and how it was obtained Ensure any Recipients who have unsubscribed from your CEMs are no longer receiving them Determine which Recipients cannot be contacted after July 1, 2017, via CEMs and ensure that no CEMs are

not sent to them Post-July 1, 2017, pursue express consent by making one on one phone calls, sending faxes or regular mail,

or by referrals (but follow the referral procedure) in addition to websites, etc. Audit CASL compliance regularly

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CASL -Software Installations

Ravi Shukla, Partner, Fogler Rubinoff LLPWhat’s “Trending Now” in Digital Advertising & Marketing Law


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CASL Phase 2 - Overview

• Phase 2 commenced on January 15, 2015.

• Regulation of the installation of computer programs goes wellbeyond prohibiting the distribution of spyware/malware.

• Impacts businesses that install computer programs on thirdparty systems/devices – such as mobile apps – despite theabsence of an improper purpose.

• A measure of temporary relief from the broadest implicationsof Phase 2 is scheduled to expire on July 1, 2017.

• Businesses, including those outside the software industry,need to: (1) review their computer program installationpractices; and (2) develop compliance strategies.

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• Broad enigmatic regulation of the installation of a “computerprogram” on another person’s “computer system”.

• Unless an exception applies, software providers must meetboth consent and content requirements.

• It is also prohibited to aid, induce procure or cause to beprocured any non-compliant software installation.

• Prohibitions apply to any computer system or person (whethercontravening or directing) located in Canada.

CASL Phase 2

CASL Phase 2

• Statutory interpretation principles:

s. 12 of the Interpretation Act “fair, large and liberalconstruction in order to attain objects”; and

exceptions are construed narrowly.

2 key exceptions are for self – installations and softwareinstalled for the purpose of public safety.

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CASL Phase 2

• Consent language must be clear and simple.

• Onus is on party who alleges they have consent to prove it .

• Types of consent:

express;

deemed express;

transitional implied.

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CASL Phase 2

• Consent to install updates or upgrades can be obtained at thetime of the original installation.

• CRTC guidance suggests that requests for express consentshould not be bundled into the general licence terms andconditions.

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CASL Phase 2

• Where the person’s conduct is such that it is reasonable tobelieve that they consent, consent to installation is deemedfor certain undefined items including:

a cookie;

HTML code;

Java Scripts, and

an operating system.

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CASL Phase 2

• Session cookies are erased when the browser is closed andusually no personal information is collected.

• Persistent cookies are stored on hard drives until expired andoften store personal information.

• Malicious or tracking cookies are spyware used tosurreptitiously build a profile.

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CASL Phase 2

• Transitional implied consent for programs installed prior toJanuary 15, 2015, updates and upgrades can be installed untilJanuary 15, 2018 so long as no notice of withdrawal ofconsent is received.

• After transition period or after notice of withdrawal ofconsent is received express consent (subject to exceptions) isrequired.

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CASL Phase 2

• Invasive software is software where the consent seeker hasthe knowledge and intent that the software will cause thecomputer system to operate in a manner that is contrary tothe reasonable expectations of the user and has any of thefollowing functions:

collects stored personal information;

interferes with control of the computer system;

changes or interferes with settings, preferences orcommands;

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CASL Phase 2

changes or interferes with stored data;

communicates with another computer system;

installs a computer program that may be activated by athird party; or

performs any other function specified in the Regulations.

• Software is not treated as invasive if the function onlycollects, uses or communicates transmission data.

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CASL Phase 2

• For invasive software, additional information must be clearlyand prominently provided, separate and apart from the licenceagreement and consent describing:

the program’s elements; functions; nature; purpose; andthe reasonably foreseeable impact on the computersystem.

• In addition, obtain an acknowledgement in writing that theuser understands and agrees that the program performs thespecified functions.

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CASL Phase 2

• Content requirement:

name of person installing the software and, if applicablethe person on whose behalf the program is being sent;

mailing address and telephone number/e-mailaddress/web site; and

a statement indicating that consent can be withdrawn.

For 1 year after an invasive program is installed, mustalso provide an electronic address to which the personwho gave consent may request removal or disabling ofthe software.

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• Upcoming key milestone July 1, 2017 when the private rightof action (PRA) provisions are expected to come into force.

• Thus far the CRTC been responsible for the enforcement ofthe Phase 2 provisions.

• Warrant executed in takedown of Toronto based server usedto distribute the Win32 Dorkbot malware family (plus 1Mcomputers in 190 countries).

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CASL Phase 2

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• CRTC has been providing temporary pragmatic comfort tomobile app developers via their creative and narrowinterpretation of “causing the installation of software onanother person’s device in the course of commercial activity”.

• CRTC has effectively read in a mental state requirement toshield legitimate software installers from liability in mostcommonly occurring situations.

• CRTC does acknowledge that Phase 2 provisions (includinginvasive software provisions) apply when app updates andupgrades are “push” installed automatically.

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CASL Phase 2

CASL Phase 2• If and when the PRA provisions come into force they are

expected to provide the basis for class actions againstsoftware providers who breach their CASL obligations.

• In addition to recovery for actual losses suffered PRAapplicants can recover up to $1M per day of contravention instatutory damages.

• An employer faces vicarious liability if a violation iscommitted by an employee acting within the scope of theiremployment, whether or not the employee is proceededagainst.

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CASL Phase 2

• Officers, directors and agents who directed, authorized,assented to, acquiesced in or participated in the commissionof the violation may also be subject to personal liability,whether or not the corporation is proceeded against.

• App platform settings for Apple Store and Google Playappear to create inherent compliance issues.

• First Parliamentary review of CASL due to be completed in2017.

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CASL Phase 2

• Tracking of an individual’s online activities to determinepersonal characteristics and preferences in order to deliveradvertising that is targeted to the individual’s inferredinterests comes within the scope of the Federal PrivacyCommissioner’s Guidelines on Privacy and OnlineBehavioural Advertising.

• Under PIPEDA if online data relates to an identifiableindividual and he or she can be identified through such data,advertisers can only collect, use or disclose such informationif the affected individual has been made aware of the tracking,its purpose and has agreed to it.

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Disclaimer: This presentation contains general information only and does not constitute legal advice. Qualified legal counsel should be consulted to assess the application of laws to specific facts.

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CASL – Software Installations

by Ravi Shukla, February 28, 2017

KEY TAKEAWAYS

CASL provisions (primarily secs. 8-10) regulate the "installation of "computer programs" on "computer systems". Those 2 terms are very broadly defined.

A key outcome of those provisions is to drive organizations to seek express consent to the software

installation, in the case of "invasive" software there is a further key requirement that there be a separate "super disclosure" prior to obtaining such consent.

Breach of the CASL software installation requirements can give rise to significant liability for, firstly, AMPs under s. 20 and, additionally post-July 1, 2017, under the expected private right of action (PRA) s. 47 ( max. liability for statutory damages of $1M per day of contravention ss. 51(1)(b) (ii)).

The software installation provisions are enigmatically and broadly drafted with the result that they appear to extend to regulate mobile app deployment, particularly where app updates and upgrades are automatically "push" installed. Problem is exacerbated by the fact that it is relatively easy to arguably fall within the invasive software sub-category.

The CRTC has issued self-installation guidance (what does "cause to install" mean in s. 8?) which provides a measure of pragmatic (but probably inaccurate) comfort against regulatory overreach, but that guidance is not legally binding and the PRA era is looming.

The CRTC admits that CASL software installation compliance issues arise in situations where the mobile app update(s) and/or upgrade(s) are installed automatically through a platform.

There are a number of open issues (as set out below) raised due to limitations imposed by platform operating procedures and settings. These create inherent difficulties for digital advertisers seeking to comply with CASL.

What steps can be taken to meet the notice, consent and written acknowledgement rules in CASL?

o Opportunities to provide notice/consent language? (for example s.10(7) which provides a regulatory mechanism for obtaining consent to upgrade and update installation "upfront" at the time of the initial software installation).

o Is it adequate to include consent language in an end user license agreement? (CRTC guidance says no; CASL, s.10(4) may be interpreted to provide a different result)

o Who is responsible for ensuring compliance with CASL? The app publisher? The app platform?

• Given the statutory interpretation principle enshrined via s. 12 of the Interpretation Act "fair, large and liberal construction in order to attain objects and the principle that exceptions are to be construed narrowly, in a given fact situation is a cookie a “computer program”? There are different types: (i) session cookies (erased when you close browser usually no PI collected – seems to fit within the

- 2 -exception); (ii) persistent cookies (stored on hard drive until expired often stored PI) and (iii) malicious or tracking cookies ( spyware used to build a profile –like a virus – are clearly programs not just data).

o When will a user will be deemed to consent to the installation of a cookie (s.10(8))?What conduct is required? Browser settings? Context specific?

o When will a user will be deemed to consent to the installation of a Java Script or HTML code ( s.10(8))?

• What steps can be taken to mitigate risks? Follow industry best practices (e.g., Ad Choices program – provides consumers with a tool that prevents interest-based tracking from happening in their browsers), additionally, the Federal Privacy Commissioner has issued guidance intended to help organizations involved in online behavioural advertising ensure that their practices are fair, transparent and in compliance with PIPEDA.

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CASL – Getting Ready for the Private Right of Action on July 1, 2017

Young Park, Partner, Fogler Rubinoff LLPWhat’s “Trending Now” in Digital Advertising & Marketing Law


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INTRODUCTION• PRA1 under CASL2 comes into force on July 1, 2017.

• Since most of CASL3 came into force on July 1, 2014, CRTC has enforcedCASL by prosecuting violations.4

• On July 1, 2017, CASL will also be enforced by private lawsuits forcontraventions of CASL and PIPEDA5 and reviewable conduct as definedin the Competition Act.6

1. Private Right of Action ("PRA") consists of ss. 47-51 and 55 of CASL (as defined below)2. "Canada's Anti-Spam Legislation", S.C. 2010, c. 23 ("CASL")3. Section 8 came into force on January 15, 2015 and PRA will come into force on July 1, 2017.4. CASL, s. 205. Personal Information Protection and Electronics Documents Act, S.C. 2000, c. 5 ("PIPEDA")6. R.S.C. 1985, c. C-34

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• Applicants can claim "actual loss or damage suffered"7 and statutorydamages.

• Potential for large damage awards.

I.e., for contraventions of CASL, up to $1 million for each day acontravention occurred.

• Widespread concern within business community of exposure to classproceedings.

7. Damages for actual losses suffered by applicants under PRA will be subject to the principles of causation and remoteness. Examples of actual losses may includecosts (for technology, consulting and human resources) incurred to redress damage to computer systems caused by malware and spyware; deployment ofresources to address and resolve customer complaints; monies lost to electronic financial fraud / identity theft schemes distributed by spam; operational costs;and wasted time and productivity.

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OverviewWith July 1st approaching, opportune time to review:

1. main features of PRA

2. available shields and defences from PRA proceedings

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1. FEATURES OF PRAScope

Section 47(1) applies to contraventions of ss. 6-9 of CASL, which prohibit:

• sending non-compliant CEMs8 (s. 6)

• in the course of commercial activity, altering transmission data in an electronicmessage without consent (s. 7)

• in the course of commercial activity, installing computer programs on any otherperson's computer system without consent (s. 8)

• aiding, inducing or procuring any act contrary to ss. 6-8 (s. 9)

8. "Commercial electronic message" as defined in ss. 1(2), CASL.

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Section 47(1) applies to contraventions of prohibition in PIPEDA againstcollection and/or use of:

• electronic addresses harvested by the use of computer programs designed tosearch for and collect such information (ss. 5 and 7.1(2), PIPEDA)

• personal information by unlawfully accessing, using or interfering withcomputer systems (ss. 5 and 7.1(3), PIPEDA)

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Section 47(1) applies to reviewable conduct under s. 74.011 of the Competition Act,where a person, for the purpose of promoting any business interest:

• sends or causes to be sent a false or misleading representation in the senderinformation9 or subject matter information10 of an electronic message11

• sends or causes to be sent an electronic message that is false or misleading in amaterial respect

• makes or causes to be made a false or misleading representation in a locator12

9. "…the part of an electronic message — including the data relating to source, routing, addressing or signalling — that identifies or purports to identify the sender or the origin of the message": s 2(1), Competition Act.

10. "…the part of an electronic message that purports to summarize the contents of the message or to give an indication of them: s. 2(1), Competition Act.11. "…a message sent by any means of telecommunication, including a text, sound, voice or image message": s. 2(1), Competition Act.12. "… a name or information used to identify a source of data on a computer system, and includes a URL: s. 2(1), Competition Act.

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3 year limitation period

"47(2) Unless the court decides otherwise, no application may be brought later than three years after the day on which the subject matter of the proceeding became known to the applicant."

• Longer than basic limitation period under Ontario's Limitations Act, 200213 of 2 years afterthe "day on which the claim was discovered".14

• PRA limitation period starts when subject matter "became known" to applicant.

• Unlike Limitations Act, it does not include the principle of "discoverability",15 although theCourt may apply that principle.16

13. S.O. 2002, c. 24, Sched. B ("Limitations Act")14. Limitations Act, s. 415. Limitations Act, s. 516. The Court applied the discoverability principle to the limitation period set out in a parallel private right of action provided under ss. 36(4) of

the Competition Act for breaches of the criminal provisions (Part VI) of that Act. See Sun-Rype Products Ltd v Archer Daniels Midland Co, 2008 BCCA 278, leave to appeal refused 2009 Carswell BC255 (SCC).

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PRA pierces "corporate veil"

52. An officer, director, agent or mandatory of a corporation may be liable for the contraventions or

reviewable conduct of that corporation if they "directed, authorized, assented to, acquiesced in or

participated in" such conduct.

• Corporate veil does not protect directors and officers of a corporation from personal liability.

• Personal liability may attach if they acquiesced to the corporation’s contraventions or reviewable

conduct.

• I.e., an officer who was aware of the conduct but did nothing to prevent it could be personally

liable.

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Vicarious liability of employers

53. A person is liable for a contravention or reviewable conduct committedby or engaged in by their employee acting within the scope of theiremployment or their agent or mandatory acting within the scope of theirauthority whether or not the employee, agent or mandatary is identified orproceeded against.

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PRA Damages51 (1) Court may order:

a) compensation for actual loss or damage suffered or expenses incurred by the applicant; and

b) maximum in statutory damages of:

− $200 for each contravention of ss. 617 and 918 not exceeding $1,000,000 for each day on which a contraventionoccurred19

− $1,000,000 for each day on which a contravention of ss. 720, 821 and 9 occurred22

− $1,000,000 for each day on which a contravention of s. 5 of PIPEDA occurred23

− for reviewable conduct under s. 74.011 of the Competition Act, $200 for each occurrence not exceeding$1,000,000 for each day on which the conduct occurred24

17. Sending non-compliant CEMs.18. Aiding, inducing or procuring an act contrary to ss. 6-8 of CASL.19. CASL, ss. 51(1)(b)(i), (iii) and (iv)20. Altering transmission data in the course of commercial activity without consent.21. Installing a computer program in the course of commercial activity without consent.22. CASL, ss. 51(1)(b)(ii), (iii) and (v)23. CASL, ss. 51(1)(b)(vi)24. CASL, ss. 51(1)(b)(vii)

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Purpose of order

51(2) The purpose of an order under paragraph (1)(b) is to promote compliance with CASL,PIPEDA or the Competition Act "and not to punish".25

• In civil proceedings, goal of damages is to compensate the plaintiff for its loss.

• Statutory damages under PRA are in addition to the "actual loss or damage suffered…

by the applicant".

• They are by definition non-compensatory (potentially punitive) and may result in a

windfall for successful applicants.

25. Mirrors purpose of administrative monetary penalties in ss. 20(2) of CASL: "The purpose of a penalty is to promote compliance with this Act and not to punish."

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Proportionality in statutory damagesComfort that awards will be proportional based on factors Court "must consider" including:26

a) purpose of order

b) nature and scope of contravention or reviewable conduct

c) person’s history of previous contraventions or reviewable conduct

d) person’s history of any previous undertaking27 or consent agreement28

e) any financial benefit person obtained from contravention or reviewable conduct

f) person’s ability to pay29

g) whether applicant has received compensation for the contravention or the reviewable conduct

h) factors established by the regulations

i) any other relevant factors30

26. See ss. 51(3), which mirrors the factors for determining AMPs under ss. 20(3) of CASL. Note that in the regulatory context for violations of CASL, AMPs set out in undertakings published by CRTC to date range from $48,000 to $200,000. Inits Blackstone Decision, the CRTC ordered an AMP of $50,000 against Blackstone Learning Corp. (a small business) for 9 violations of ss. 6(1) of CASL for sending over 385,000 CEMs without consent over a period of 2 months based on theparallel factors set out in ss. 20(3) of CASL.

27. Under ss. 21(1) of CASL.28. Under ss. 74.12(1) of Competition Act.29. In the regulatory context, the CRTC has stated that this factor need not be limited to the person’s immediate ability to pay an AMP but can also include general indicia of a person’s revenue-generating capacity: Blackstone Decision at para 51.

Further, an AMP that precludes a person from operating on a commercial basis is undesirable as it would also preclude that person’s ability to comply in the regulated activity going forward: Blackstone Decision at para 44.30. In the regulatory context, a "lack of any indicators of self-correction" has been identified as a relevant factor: Blackstone Decision at para 54.

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2. SHELTER FROM PRA

• Undertakings

• Due Diligence

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A. Undertaking as a shield

A business concerned with exposure to PRA proceedings may shield itself by enteringinto an undertaking with the CRTC.

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48 (1) The court may not consider an application for an order against aperson under paragraph 51(1)(b) that alleges a contravention of any ofsections 6 to 9

a) if the person has entered into an undertaking under subsection21(1), or has been served with a notice of violation undersubsection 22(1), in connection with the act or omission referred toin the application.

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Limits to the undertaking as a shield

• Undertaking must be accepted by CRTC.31

• Undertaking must be in connection with an act or omission referred to in the PRAapplication.

• If the undertaking does not cover all acts or omissions referred to in the PRAapplication, it will not be a full shield.

• Undertakings will include any conditions the CRTC considers appropriate32,including the payment of an AMP.33

31. CASL, ss. 21(2)(a). Note ss. 21(2) of CASL refers to a "person who is designated for the purpose of this section", which is the Chief Compliance Officer of the CRTC.

32. CASL, s. 21(2)(a)

33. CASL, s. 21(2)(e)

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Risks of seeking an undertaking

• Business must self-report the full extent of its contraventions toCRTC.

• CRTC may refuse or insist on terms that business cannot accept.

• If an undertaking is not reached, business has put itself in thecross-hairs of CRTC for regulatory action.

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B. Due Diligence Defence

"Defence

54 (1) A person must not be found to have committed a contravention of any ofsections 6 to 9 of this Act or of section 5 of the Personal InformationProtection and Electronic Documents Act that relates to a collection or usedescribed in subsection 7.1(2) or (3) of that Act, or to have engaged in conductthat is reviewable under section 74.011 of the Competition Act, if theyestablish that they exercised due diligence to prevent the contravention orconduct, as the case may be."34

• Defence is not available for deliberate misconduct.

34. Mirrors due diligence defence for violations of CASL in ss. 33(1) and (2).

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Compliance programs35 may include:

• written compliance policies for employees, contractors and third parties authorized to send CEMs36

• appointing compliance officers to ensure compliance

• training programs for employees, partners and contractors

• tracking CEM complaints and resolution37

• implementing updated monitoring and auditing mechanisms

• consistent disciplinary procedures38

• annual review of the compliance program

• good record-keeping practices39

35. For guidance, see generally the Compliance and Enforcement Information Bulletin, CRTC 2014-326 dated June 19, 2014 ("Bulletin").36. See e.g. Undertaking by Rogers Media Inc. dated November 20, 2015.37. To prevent and detect non-compliance and assess the efficacy of compliance program: Bulletin, #15. 38. A consistent discipline code to address CASL contraventions may bolster the credibility of the compliance program and deter contraventions by employees: Bulletin, #17.39. To identify potential non-compliance, investigate and address customer complaints, monitor compliance program, identify need for corrective action, record implementation of

action and establish a due diligence defence: Bulletin, #9.

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Conclusion

• Uncertain times lies ahead for manybusinesses.

• Uncertain how and to what extentapplicants and their counsel will utilizePRA.

• Uncertain how the Courts will interpretPRA and the range of statutory damagesthey may award.

• But one thing is certain: businesses wouldbe well-served to prepare for the PRA.

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CASL – Getting Ready for the Private Right of Action (PRA) on July 1, 2017

by Young Park, February 28, 2017

KEY TAKEAWAYS

Preparing for the Private Right of Action (PRA)

PRA under CASL comes into force on July 1, 2017.

Contraventions of CASL can be enforced by private lawsuits.

Private applicants can claim damages for "actual loss" and statutory damages under PRA.

Potential for large statutory damage awards exists – i.e., for sending non-compliant commercial electronic messages (CEMs), up to $1 million for each day a contravention occurred.

While the magnitude of statutory damages courts may award is uncertain, there is reason to expect restraint as the:

purpose of statutory damages is to promote compliance with CASL "and not to punish" (s. 51(2)); and

factors the courts "must consider" include the person's ability to pay (s. 51(3)).

Both PRA statutory damages for contraventions (s. 51(2)) and administrative monetary penalties (AMPs) for violations (s. 20(2)) have the same purpose: compliance, not punishment.

Courts and regulators must also consider the same factors when awarding statutory damages and AMPs (ss. 20(3) and 51(3)).

CRTC's October 2016 decision in Blackstone provides some guidance on how courts may approach statutory damage awards. Blackstone is a small business that sent over 385,000 non-compliant CEMs to employees of 25 government organizations over 2 months. While the Designated Person sought an AMP of $640,000, the CRTC focussed on Blackstone's ability to pay and reduced the AMP to $50,000, even though Blackstone had resisted the investigation and showed no "indicators of self-correction".

As businesses that engage in digital marketing in Canada enter unchartered waters on July 1, 2017, they would be well-served to revisit and strengthen their CASL compliance programs.

Businesses that have engaged in adequate due diligence "must not be found to have committed a contravention" of CASL (s. 54(1)).

Due diligence is a full shield to a PRA proceeding (as it is for regulatory proceedings under ss. 33(1)). It is the best proactive step that businesses can take to prepare for July 1, 2017.

But note that the due diligence defence is not available for deliberate contraventions of CASL.

If a business discovers that it has contravened CASL on or after July 1, 2017, it may enter into an undertaking (settlement agreement) with the CRTC to shield itself from statutory damage awards under the PRA.

But to act as a full shield, the undertaking must (1) be accepted by the CRTC, (2) cover the full scope of the contraventions alleged in a PRA proceeding and (3) be completed before "the court determines that it may consider an application for an order against a person" for statutory damages in the PRA (s. 48(1)(a)).

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CONTESTS ON SOCIAL MEDIA –PREPARING WINNING RULES AND ADS

Yadira Flores, Fogler Rubinoff LLPWhat’s “Trending Now” in Digital Advertising & Marketing Law


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• Contest Rules and Ads (in Context of Social Media)

• Criminal Code

• Competition Act

• Not Addressing Quebec’s Special Contest Laws

• Social Media Examples

• Facebook

• Twitter

Focus of Presentation

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• Games of “pure chance” are prohibited

• Creates the requirement for a skill testing question to qualify“selected entrant” as the “winner” - which has the effect ofturning a game of “pure chance” to one of “mixed chance andskill”.

• Courts have determined that a 4 step, Grade 6 level math questionis sufficient for the skill testing question used for the contest.

• The skill testing question must also be “reasonable” and fair inthe circumstances (e.g. provide advance notice/communication ofthe test and rules for test) etc.

• There are no special considerations when using social mediaplatforms to run contest and to administer a skill-testing questionfor the “selected entrant”

Criminal Code

• “No purchase necessary”…or other “valuable consideration”

• Individuals must be able to enter contest without making a“purchase” or providing any other “valuable consideration”(unless the prize is not for “goods, wares or merchandise”). BUT-general practice is to always have a no purchase option, even ifprize is a cruise.

• Exception to No Purchase Rule: where eligible entrants arethose that have already made some sort of purchase withoutcontest being advertised (e.g. spectators at a concert, orspecific cardholders).

• Application in Social Media - Raises the question in context ofinternet, whether having a requirement that entrants “follow” theSponsor (for example) – is some type of “consideration”. Likelywant to err on side of not having such a requirement.

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Criminal Code

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• Full Contest Rules• Competition Act requires adequate and fair disclosure.

• Commissioner takes the view that:

To satisfy the requirement disclosure should be

i. Made in a reasonably conspicuous manner

ii. Made before the potential entrant is inconvenienced

• A contest advertised in the media should not require that aconsumer visit or patronize any particular retail outlet of theadvertiser, or one of its franchises.

• If full contest rules can’t be made available withoutinconveniencing a potential entrant, contest sponsors can use“mini rules” – which are like a summary of the full rules (theseare usually easier to display).

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Competition Act

Competition Act• Bureau indicates Mini Rules should include the following:

− Number & approximate value of prizes

− Regional allocation for prizes

− Odds of winning

− Any fact within the knowledge of the contest sponsor that materially affects chances of winning (e.g. mechanics of contest)

− Date contest closes

− Skill Testing Question requirement

− Indicate no purchase necessary

• Mini Rules need to be visible and readable

• Must indicate where full contest rules are available – accessingcontest rules should not require navigation of complex website orpurchase of software etc.

• Hyperlinks appear to be an acceptable way of making mini rulesaccessible where sponsor does not have the space in the electronicadvertisement to fully display the mini rules.

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Contests on Social Media Sites

• Facebook

Need to follow “Facebook Pages Terms” – Promotions

− Onus on contest sponsor for lawful operation of contest(including contest rules just discussed).

− Must provide a complete release of Facebook.

− Acknowledge that contest is in no way sponsored, endorsed oradministered by, or associated with Facebook.

− Participant is providing information to sponsor and not Facebook.

− Friend connections and other Facebook functionality cannot beused to administer promotions (e.g. can’t have a requirement for entrant to share something on their timeline in order to enter).

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Contests on Social Media Sites

• Twitter – “Guidelines for Promotions on Twitter” Sponsor should not encourage creation of multiple accounts.

− Contest rules should discourage this by stating that anyone thatsets up multiple accounts will be ineligible.

Sponsor should discourage posting of same Tweet repeatedly.

− Contest rules and ad should not ask for “retweets”

Sponsor should ask participant to use an @reply to the sponsor so thatsponsor can see all entries.

Sponsor should encourage the use of topics relevant to the contest (e.g.#FRcompetition)

− Have users include the hashtag topic

Sponsor and participants should review the “Twitter Rules” and search“best practices” before starting the contest.

Onus on sponsor to comply with all applicable laws and regulations.

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Contests (On Social Media) by Yadira Flores, February 28, 2017

KEY TAKEAWAYS

Criminal Code Prohibitions

► Don't create a purchase requirement or other valuable consideration as sole means of entering contest – must provide a "purchase free"/"consideration free" method of entrance (e.g. short essay). ► Including a requirement that participants "follow" the sponsor, or "like" a sponsor's post, etc. could be construed as "valuable consideration" for the sponsor. Avoid requirement altogether or provide alternate means of entering without it. ► Don't forget the "skill testing" question to qualify the "selected entrant" as the winner. This is a standard requirement for contests, and is no different in the social media context. ►Provide advance notice of the test and rules for the test to participants. A 4 step, Grade 6 level math question should be sufficient.

Complying with Competition Act ►Prepare full rules and mini rules that participants can easily access without being inconvenienced. ►If only mini rules are displayed on advertisement, indicate where the full contest rules can be found. ►In social media sites, there is sometimes limited space to advertise the contest (e.g. Twitter has a max of 140 characters per tweet). In this case, hyperlinks to mini rules and full contest rules can be a means of complying with the Competition Act. ►Provide a hyperlink each for mini rules and for full contest rules as a best practice. Contests on Facebook ►Follow the "Facebook Pages Terms" for information about how to conduct a contest using Facebook's platform. ►Be prepared to release Facebook of any liability associated with the contest as Facebook does not assume any legal responsibility in connection with the contest. ►Note that friend connections and other Facebook functionalities such as "likes" cannot be used to administer promotions. ►Be mindful of CASL – and ensure that you have express or implied consent before contacting people in connection with the contest. ►Obtain legal advice if unsure about how to comply with applicable laws. Contests on Twitter ►Follow "Guidelines for Promotions on Twitter" ►Also review "Twitter Rules" and "Best Practices" ►Come up with a hashtag that you want to use for the contest and ask participants to use the hashtag which helps to promote the contest and organize information for the contest. ►Don't include requirements for "retweeting" and discourage the use of more than one Twitter account as part of contest rules. Twitter's guidelines indicate that such activities should be discouraged. ► Obtain legal advice if unsure about how to comply with applicable laws.

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Protecting Trademark Rights in Digital Advertising – Online Trade-marks in Metatags, Hashtags, Keywords and

Domain Names

Colleen Spring Zimmerman, Partner, Fogler Rubinoff LLPWhat’s “Trending Now” in Digital Advertising & Marketing Law


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Agenda

1. Trademark – Use and Claims

2. Metatags

3. Hashtags

4. Keywords

5. Domain Names

6. Concerns

7. Metatags: Canadian Cases

8. Keywords and Domain Names: VCC Case

9. Best Practises

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Trademarks - Use

• Trade-marks Act

• Wares: Section 4(1)

Trade-mark is deemed to be used in association with goods if, at thetime of the transfer of the property in or possession of the goods, in thenormal course of trade, it is marked on the goods themselves or on thepackages in which they are distributed or it is in any other manner soassociated with the goods that notice of the association is then given tothe person to whom the property or possession is transferred.

• Services: Section 4(2)

A trade-mark is deemed to be used in association with services if it isused or displayed in the performance or advertising of those services:

• services must be available in Canada.

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Trademark Use and Claims

• Infringement Sections 19/20:

• Regarding use of the same or confusingly similar trademarks

• Section 6(5) – factors

• Passing Off Section 7

• Section 22:

22 (1) No person shall use a trade-mark registered by another personin a manner that is likely to have the effect of depreciating the valueof the goodwill attaching thereto.

• Section 9 – Official Marks:

• No person shall adopt in connection with a business, as a trade-mark or otherwise, any mark consisting of, or so nearlyresembling as to be likely to be mistaken for……

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• Metadata about a web page for Search Engine Optimization(SEO).

• Metatags are snippets that describe a webpage’s content.

• By words or short phrases, they tell search engines what aweb page is about.

• Metatags appear in HTML (Hypertext Markup Language)code to provide search engines with this information.

• Metatags are not visible on the website.

Metatags: What Are They?

Metatags: What Are They?

• Use can include our client’s trademarks at our client’s webpages.

• An Internet search engine may use metatags to identify andrank websites in search results – “higher” search rankings.

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• A hashtag is a type of label or metadata tag used on social networkand micro blogging services which makes it easier for users to findmessages with a specific theme or content:

• #redcarpetetalk; #oscars

• Users create and use hashtags by placing the hash character # (alsoknown as the number sign or pound sign) in front of a word orunspaced phrase, either in the main text of a message or at the end.Searching for that hashtag will yield each message that has beentagged with it.

• A hashtag archive is consequently collected into a single streamunder the same hashtag.

• Hashtags are visible to the viewer of the content.

Hashtags: What Are They?


• Because of its widespread use, hashtag was added to the Oxford EnglishDictionary in June 2014. The term hashtag can also refer to the hashsymbol itself when used in the context of a hashtag.

• First popularized on Twitter; extended to other social media sites topromote/share and search for content.

• For example, on the photo-sharing service Instagram, the hashtag #blueskyallows users to find all the posts that have been tagged using that hashtag.

• Hashtags can be inserted anywhere within a sentence, either preceding it,following it as a postscript, or being included as a word within the sentence(e.g. "It is #sunny today").

• The quantity of hashtags used in a post or tweet is just as important as thetypes of hashtags used. The misuse of hashtags can lead to accountsuspensions.

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• Since 2010, the number of trademark applications forhashtags has, on average, approximately doubled everyyear.

• Canada is 8th in the world for such filings.

• No reported Canadian decisions confirming thathashtags can function as trademarks and therefore attractliability for unauthorized third party use.

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Keywords: What Are They?

• Used for searching on the Internet.

• Keyword advertising - Such as Google Ad Words.

• Used to achieve better rankings in search engines.

• Keyword suggestion tools usually aid the process, like the Google AdwordsKeyword Planner, which offer thesaurus and alternative keywordsuggestions.

• Use of Keywords is a valuable and high return activity in the searchmarketing field.

• Website operator places bids with search engines like Google for specificKeywords to be associated with their website.

• When a Keyword is searched, the search engine will display the highestbidder’s ad or website as a “sponsored link”:

When that link is clicked, the website owner is charged the amount ofits bid.

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Domain Names: What Are They?• Domain names are formed by the rules and procedures of the

Domain Name System (DNS). Any name registered in the DNS is adomain name.

• The Internet Corporation for Assigned Names and Numbers(ICANN) manages the top-level development and architecture of theInternet domain name space. It authorizes domain name registrars,through which domain names may be registered and reassigned.

• Domain names are often referred to as domains and domain nameregistrants are referred to as domain owners.

• Domain name registration with a registrar does not confer any legalownership of the domain name, only an exclusive right of use for aparticular duration of time.

• In 2015, 294 million domain names were registered.

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Domain Names: What Are They?• Domain names are used to establish a unique

identity. Organizations can choose a domainname that corresponds to their name, helpingInternet users to reach them easily.

• The use of domain names in commerce maysubject them to trademark law.

• Domain Name legal disputes at record high.

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• No government examination of adoption or use, no controlper se.

• Privately policed by trademark owners.

• Confusion as to source, resulting in lost revenue.

• Litigation alleging unauthorized trademark use – expensiveand time consuming.

• Brand disparagement, especially in the context of hashtags,keywords and domain names.

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Metatags, Hashtags, Keywords and Domain Names: Concerns

Metatags: Canadian CasesGeneral Principles:

• Use of trademarks in metatags does not, by itself, createa likelihood of confusion.

• The trademarks in the metatags are not visible at thewebsite.

• Website is usually clearly identified as being that of thedefendant, therefore no likelihood of confusion orpassing off.

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Metatags: Canadian Cases

Red Label Vacations Inc. (redtag.ca) v. 411 Travel Buys Limited (411travelbuys.ca), 2015 FCA 290, aff’g 2015 FC 19

• FCA upheld the trial decision (denying the Plaintiff’s claims),but also made statements limiting the applicability of the TrialDivision’s decision:• “In some situations, inserting a registered trademark (or a

trademark that is confusing with a registered trademark) in ametatag may constitute advertising of services that would giverise to a claim for infringement.”

• “To conclude, the decision of the Federal Court must be read inlight of the facts before the Court. The extent to which atrademark may be used in metatags without infringing thetrademark is, of necessity, fact specific.”

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Keywords and Domain Names

Vancouver Community College v. Vancouver Career College 2017 BCCA 4

Facts:

• Use of Official Mark “VCC” in internet advertising and domainname – vccollege.ca.

• Use of VCC and Vancouver Community College in Keywordadvertising.

• Defendant purchased the Keyword VCC which generated most ofthe traffic to its vccollege.ca website.

• Defendant’s advertisements almost always appeared in searches ofthe VCC term.

• The search results for vccollege.ca also displayed the VCCcomponent in bold lettering vccollege.ca.

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Findings:

• Elements of passing off found – goodwill, public confusion anddamage.

• Confusion to be assessed from the searcher’s first encounter withthe search results (initial interest confusion).

• When the user encounters the trademark online, including in theGoogle search results, and not merely when the user reaches the target website.

• When the search engine results were generated and displayed:

The moment of first impression in the consumer’s mind.

The test person is the average consumer.

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• As to domain names

• Defendant’s advertisement using the domain namevccollege.ca displayed by search engines alongside searchresults for VCC:

• Create confusion.

• Amounts to passing off.

• Use of a trademark as a domain name is unlawful unless aportion of the domain name allows the consumer todistinguish between the owner of the trademark and theowner of the Domain Name without reference to theunderlying website:

• The addition of “ollege” in vccollege.ca was insufficientto avoid confusion.

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• As to Keywords:

• Merely bidding on a Keyword is not itself delivery of amessage.

• Key factor is the message communicated by thedefendant.

• Bidding on Keywords, combined with a confusingadvertising message, can amount to passing off.

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• Court held: permanent injunction from the useof VCC and vccollege in respect of theDefendant’s internet presence.

• FCA remitted the case back to the Trial Court:

• As to damages and costs and as todefendant’s adoption and use of thePlaintiff’s Official Marks VCC andVancouver Community College.

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Best Practices

• Do not assume that use of a competitor’s or other thirdparty’s trademark in metatags, hashtags, keywords ordomain names is legal:

• Review strategy with trademark counsel to assesswhether you could be facing liability.

• Use of a third party’s trademark in a metatag, hashtag,keyword or domain name may or may not give riseautomatically to liability:

• Fact dependent.

• Liability will likely attach if trying to mislead as thesource of goods and/or services.

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Best Practices

• Consider filing trademark applications for hashtag anddomain name marks for long term marketing campaigns,if mark will be used in hashtag or domain name format(i.e. #trademark).

• Address marks/use as metatags, hashtags, keywords anddomain names in all agreements and policies addressingIP, e.g. licence agreements, distribution agreements,trademark co-existence, settlement and employmentagreements.

• Monitor social media for problematic uses and takeappropriate action when required.

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Best Practices

• Property such as trademarks, domain names andhashtags – transferrable as an asset of a company –therefore valuable.

• Trademark Searching – for adoption of trademarks –also check Domain Names and consider hashtags.

• Register the Domain Name for the trademark to beadopted - .ca and .com.

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Protecting Trademark Rights in Digital Advertising: Metatags, Hashtags, Keywords and Doman Names

by Colleen Spring Zimmerman, February 28, 2017

KEY TAKEAWAYS

Metatags Metatags are words or short phrases that describe a webpage's content and tell search engines about the

content of a web page metatags are not visible on a website, but are important for search results

Hashtags Hashtags are a combination of a number sign and word/phrase, for example: #FoglerRubinoff, used on

social media networks that make it easier for users to find messages with a specific theme or content Hashtags are visible to viewers of the content Trademark applications for hashtag marks have approximately doubled every year since 2010

Keywords Keywords are used for searching the internet Keyword advertising (such as Google Ad Words) is used to achieve a higher ranking on search engines Merely bidding on keywords is unlikely to infringe a trademark – however, an organization bidding on

keywords and having confusing advertising messages may amount to trademark infringement or passing off Domain Names Domain names are used to establish a unique identity to permit internet users to find websites Domain name registration does not confer any legal ownership of the domain name, only an exclusive right

of use for a particular duration of time Use of domain names is subject to trademark law; legal disputes over domain names are at a record high

Vancouver Community College v. Vancouver Career College 2017 BCCA 4 Use of keywords and domain names for internet advertising Initial interest confusion Key factor is the message communicated by the Defendant to the public Passing off found

Best Practices when using Metatags, Hashtags, Keywords and Domain Names 1. Never assume that using a competitor's or a third party's trademark in a metatag, hashtag, keyword or

domain name is legal – speak to a trademark lawyer to determine the best approach; 2. Confusion for online trademark infringement and/or passing off is determined at the point when the searcher

first encounters the search results – therefore ensure that your organization is not violating another's trademark in respect of the search stage;

3. Consider filing trademark applications for hashtags and/or domain names that may be used long-term; 4. In all agreements addressing intellectual property, address the use of metatags, hashtags, keywords and

domain names; 5. Keep in mind that domain names and hashtags may be of value when you are selling or buying assets; and 6. Monitor social media for any problematic uses of your trademark.

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Effective Online Disclaimers -Making Fine Print Enforceable

Bill Hearn, Partner, Fogler Rubinoff LLPWhat’s “Trending Now” in Digital Advertising & Marketing Law


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THE BIG PICTURE

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• Deceptive advertising under Competition Act

• Informed by Competition Bureau’s guidance which includes:

• The Deceptive Marketing Practices Digest, June 2015

• “Online Advertising in Canada”

• “Disclaimers Demystified”

• Application of the Competition Act to Representations onthe Internet, Enforcement Guidelines, October 16, 2009

• Asterisks, Disclaimers and Other Fine Print, MisleadingAdvertising Bulletin, 1990

My Focus

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• Bureau identifies four main examples of deceptive online ads

• Common element of each is that the advertiser has notadequately disclosed information necessary for consumers tomake informed choices

• The “truth”, if revealed at all, is often buried in fine printdisclaimers or obscured by placement in the context of theoverall advertisement

Bureau’s View

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• The four problematical examples are:

Where key terms are inadequately disclosed

Where the true cost is hidden/savings claim false

Where the online review does not disclose the connectionbetween the reviewer and the advertiser – “astroturfing”

When what looks like unbiased information is actuallyadvertising – “deceptive native advertising”

Bureau’s View

TRUTH IN ADVERTISING -

GENERAL RULES

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Deceptive Representations

• Can’t make representation to public that is deceptive inmaterial respect and promotes a good/service/business interest

• With CASL amendments to the Competition Act (in force July1, 2014), the representation need not be material if it is madein certain areas of an electronic message – i.e., the electronicmessage’s locator (e.g., URL and metadata), senderinformation or subject matter line

• CASL also added to Competition Act a general deceptiveelectronic messages prohibition with materiality requirement

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• Criminal provision requires “intent” (that the advertiser“knowingly or recklessly” engaged in deceptive advertising)

Upon indictment, a fine without upper limit at thediscretion of the Court, imprisonment of up to 14 years,or both

• Civil provision does not require intent

Administrative monetary penalties (AMPs) of up to $10million (first occurrence) and up to $15 million (for eachsubsequent occurrence)

Paid restitution to purchasers

Freeze assets

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Criminal vs. Civil - Sanctions

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Basic Rule & Standard for Ad Interpretation• The “General Impression” Test

General impression conveyed by a representation, as wellas its literal meaning, will be taken into account whendetermining whether or not the representation is deceptivein a material respect

Level of sophistication of average consumer wheninterpreting general impression of advertisement fordeception has been in flux over past couple of years

Whether average consumer can be taken to be a“reasonable” person or merely a “credulous” one

Makes “careful consideration of disclaimers” even moreimportant for advertisers

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DISCLAIMERS

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• First, disclaimer may expand on, or clarify possibleambiguities in the main claim

• Second, disclaimer can’t restrict, contradict or somehownegate the main claim

• Other Rules of Thumb – Disclaimers

simple, prominent, clear and close

likely to be read

large enough to be clearly visible and readable

not contracts that consumers must peruse

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Bureau’s Two Basic Principles

• Ads in many digital formats

• Ads appear across interconnected platforms

• Consumers “on the go” encounter online advertisingthroughout their day and assess this information on mobiledevices

• If the format only allows the ad to unfold through a series ofpages or steps, consumers may be misled if importantinformation is relegated to a disclaimer

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Disclaimers’ Digital Dilemma

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• Same ad, viewed on one platform or mobile device, maypresent the disclaimer in a way that is not obviouslyaccessible to consumer

• When online ad is shared, there is a risk that fine printdisclaimers get lost depending on the constraints of thesecondary platforms or mobile devices

• These challenges significantly limit the likelihood that fineprint disclaimers will be effective in online ad

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Disclaimers’ Digital Dilemma

• Application of the Competition Act to Representations on theInternet, Enforcement Guidelines, October, 2009

Disclaimers

− where possible, disclaimer should appear on the samescreen and close to the main representation

− hyperlinks can be an effective means of providingdisclaimers

− if information is critical to ensuring ad is notdeceptive, it may not be appropriate to use linking to navigate to a disclaimer appearing on a separate page

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Bureau Guidelines for Web Reps

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• Application of the Competition Act to Representations on theInternet, Enforcement Guidelines, October, 2009

Disclaimers

− for all “required disclosures” (such as contest mini-rules), they must be displayed in such a way that they are likely to be read

» e.g., notice of contest should not require readers to take an “active step” (like sending an email or making a phone call) to get the required information; Bureau does not consider clicking on a clearly labelled hyperlink as an “active step” – thus “bit.ly” links may be acceptable

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Bureau Guidelines for Web Reps

• In March 2013, the US Federal Trade Commission published.com Disclosures – How to Make Effective Disclosures inDigital Advertising

• While not law in Canada and not binding on the CompetitionBureau, this document contains practical guidance forCanadian advertisers illustrated by examples of advertising inthe digital marketplace

• FTC guidance says advertisers should relegate disclosures toa hyperlink only if impossible to make the disclosuresotherwise

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US FTC .com Disclosures

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• FTC recommends that advertisers hyperlink disclosures asspecifically as possible and right next to the claim requiringdisclosure

For Twitter, the FTC recommends that advertisers avoidplacing disclosures after a bit.ly link (on the assumptionthat, at best, consumer don’t necessarily understand thenature and relevance of the information obtained whenclicking on it or, at worst, consumers stop reading a tweetonce they arrive at the link)

− This guidance is more specific and arguably stricterthan the Bureau’s guidance

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US FTC .com Disclosures

Scrolling

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10

Pinching and Zooming

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• FTC recently held one-day public workshop “PuttingDisclosures to the Test”

Goal to improve the evaluation and testing of disclaimers

How to evaluate whether disclosures are effective

Needed disclosures should grab a consumer’s attention orbe difficult to miss

FTC has long history of encouraging effective disclaimers

If consumers are overwhelmed disclaimers do little good

See FTC website for workshop materials

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FTC Workshop - Sept 2016

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ENFORCEMENT ACTIONS

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Ads Where Key Terms HiddenCommissioner v. Yellow Page Marketing B.V., 2012

• Advertiser faxed “fake invoices” to businesses – a scam

• Faxed ads contained a fine print disclaimer – returned faxesobligated businesses to a two-year contract with the sender ata cost of $1,428/year

• Court found fine print disclaimer ineffective and ordered

contracts null and void

AMPs totaling $9,035,000

corrective notices

full restitution

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12

Ads Where Key Terms HiddenCommissioner’s Premium Text Messaging Case, May 2016

• In September 2012, Commissioner began court proceedingsagainst Bell, Rogers, Telus and the Canadian WirelessTelecommunications Association (CWTA) alleging deceptiveadvertising relating to premium text message and rich contentservices (such as trivia questions and ringtones) for mobilephones

• Commissioner was initially seeking full customer refunds andAMPs totalling $31 million – that is, $10 million each fromBell, Rogers and Telus and $1 million from the CWTA

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• Commissioner alleged that customers were led by third partyadvertisers into believing this content was free, when it wasnot

• In fact, the premium-rate digital content could cost up to $10per transaction and up to $40 for a monthly subscription –these costs were over and above standard text messagingplans

• Commissioner concluded that fine print disclaimers in the“calls to action” stating that the premium text messagingservices were not free but instead cost money wereinsufficient to make the ads truthful

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13


• In March 2015, Rogers agreed to pay up to $5,420,000 incustomer refunds – no AMP

• In December 2015, Telus agreed to pay up to $7,340,000 incustomer refunds and to donate $250,000 to consumer advocacy and research groups – no AMP

• In May, 2016, Bell agreed to pay up to $11,820,000 incustomer refunds and to donate roughly $800,000 to consumer advocacy and research groups – no AMP

• In all, total consumer refunds of over $24 million and over $1million in donations to leading consumer advocacy and research groups – but no AMPs

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Ads Where True Cost HiddenAvis and Budget, June 2016

• In March 2015, the Commissioner filed an application withthe Competition Tribunal alleging deceptive vehicle rental price advertising

• Commissioner initially sought a total of $30 million in AMPsand $35 million in refunds for consumers

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14


• Commissioner alleged that:

Avis and Budget advertised prices for vehicle rentals thatwere not attainable due to additional fees imposed duringthe rental process (so-called “drip/partition” pricing)

These fees were characterized as taxes, surcharges andfees that governments and agencies required Avis andBudget to collect from consumers when, in fact, Avis andBudget imposed these fees to recoup their costs of doingbusiness

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• First court proceeding for “deceptive electronic messages”

• Commissioner alleged Avis and Budget used deceptiveelectronic messages to advertise - specifically

there were deceptive representations in the subject matterline of emails and other electronic messages (that did notrequire materiality), such as “Up to 25% off” – discountrelated only to base price, not to additional fees

the ads were also contrary to general prohibition againstdeceptive electronic messages (that required materiality)

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• Avis and Budget paid $3 million AMP and $250,000 towardsthe Bureau’s investigative costs

• Bureau’s investigation found that certain prices and discountsinitially advertised were not attainable because consumers were charged additional mandatory fees (ranging from 5% to 20% of the originally advertised price) that were only disclosed later when making a reservation

• Bureau concluded ads were deceptive even with fine printdisclaimers and even though an estimate of the fees was disclosed before consumer completed their reservation

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• Under consent agreement, Avis and Budget agreed:

not to advertise car rentals and associated products atprices that were not attainable; and

to revise the description of “additional fees” to ensure thatit does not give the deceptive impression that these feesare required by government or other agencies

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17

Ads Where True Cost HiddenComwave, September 2016

• Under consent agreement, Comwave agreed to pay AMP of$300,000 and $60,000 towards the Bureau’s costs

• Bureau concluded Comwave advertisements regarding itscharges and the level of service for Internet and home phone connections were deceptive

Ads misrepresented charges and advertised prices wereunattainable because of additional mandatory fees

Ads also misrepresented services as “unlimited” when infact there were monthly caps on usage – i.e., at certain points, limits (such as slower speeds) were placed on usage (a practice known as “throttling”)

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• In addition to the prices prominently claimed in the mainbody of its advertisements (e.g., $49.95/month), Comwavecharged consumers “non-optional fees” disclosed only in fine print disclaimers

• Commissioner found these fine print disclaimers ineffective

general impression was that consumers could obtainservices from Comwave at prices that were not in factattainable

it was not sufficient that, as part of the intake/salesprocess, consumers were given an itemized breakdown ofcharges including the non-optional fees

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35

Ads Where Savings Claims FalseAmazon, January 2017

• Under a consent agreement, Amazon agreed to pay an AMPof $1,000,000 and $100,000 towards the costs of the Bureau’s two-year investigation

• In August 2015, the Commissioner commenced an inquiryinto allegedly deceptive online price advertising by Amazon

• Commissioner concluded that Amazon advertisements (on itswebsite, in mobile apps, in other online ads, as well as in emails sent to customers) deceptively represented “savings claims”

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19


• Amazon often compared its prices to “ordinary/regularprices” (or “list prices”) claiming attractive savings for consumers – for example, the online representation would read

List Price: CDN$ 39.99

Price: CDN$ 29.99

You Save: CDN$ 10.00 (25%)

• Commissioner concluded these claims created the generalimpression that prices for items offered on www.amazon.cawere lower than prevailing (or “ordinary”) market prices

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• Commissioner determined that Amazon relied honestly on itssuppliers to provide list prices without independently verifying that those prices were accurate – i.e., Amazon had failed to substantiate its “sale price claims”

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• Specifically, as required under the “ordinary price claims”provisions of the Competition Act, Amazon couldn’t show that its advertised “ordinary pricing” (in this case, for 12 Blue-ray movies) was pricing that satisfied either

“the volume test” – i.e., it was not pricing at whichsuppliers generally in the market had sold a substantial volume of the product; or

“the time test” – i.e., it was not pricing at which theproduct had been offered for sale in good faith for a substantial period of time

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• Commissioner also found that the electronic messages (suchas emails) sent by Amazon with similar pricing advertisements and links to its website contravened the general prohibition on “deceptive electronic messages” in the Competition Act (again, the ones introduced under CASL on July 1, 2014)

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21


• As stated by the Commissioner in the recitals to the consentagreement, the AMP would likely have exceeded $1 million had Amazon

not fully cooperated with the Bureau throughout the two-year inquiry (e.g., by voluntarily providing relevant information)

not already had an effective corporate complianceprogram

not taken a number of voluntary and pro-active steps toaddress the Bureau’s concerns

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• Not really a “fine print disclaimer” case

The main “savings claims” were not substantiated andtherefore, from the Bureau’s perspective, were irreparablydeceptive

No fine print “clarifying/contradicting” disclaimers wouldhave saved these deceptive savings claims and made themotherwise “truthful”

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22


Better … but may still be a problem from Bureau’s standpoint

List Price: CDN$ 39.99*

Price: CDN$ 29.99

You Save: CDN$ 10.00 (25%)** Other retailers (including Amazon) may sell for less. The “list price” leading to the “You Save” claim has not been verified as the“ordinary price” in the market. It is merely the price at which the Supplier suggests Amazon should sell the product at retail. The ordinary price may be less than the list price.

Slightly better … but likely may still be a problem from Bureau’s standpoint

List Price: CDN$ 39.99 *

Price: CDN$ 29.99* Other retailers (including Amazon) may sell for less. The “list price” has not been verified as the “ordinary price” in the market. It is merely the price at which the Supplier suggests Amazon should sell the product. The ordinary price may be less or more than the list price.

43


Better … but may still be a problem from Bureau’s standpoint

List Price: CDN$ 39.99*

Price: CDN$ 29.99

You Save: CDN$ 10.00 (25%)** Other retailers (including Amazon) may sell for less. The “list price” leading to the “You Save” claim has not been verified as the“ordinary price” in the market. It is merely the price at which the Supplier suggests Amazon should sell the product at retail. The ordinary price may be less than the list price.

Slightly better … but likely may still be a problem from Bureau’s standpoint

List Price: CDN$ 39.99 *

Price: CDN$ 29.99* Other retailers (including Amazon) may sell for less. The “list price” has not been verified as the “ordinary price” in the market. It is merely the price at which the Supplier suggests Amazon should sell the product. The ordinary price may be less or more than the list price.

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23

45

“Disclaimers” Key Takeaways

46

• Don’t try to fool consumers with disclaimers

do use clear, simply worded disclaimers to expand on, orclarify, main claim

don’t use disclaimers to restrict or contradict main claim

• Disclaimers should be prominent close to main claim beingexpanded on or clarified

don’t bury or hide disclaimers

• Advertisements (and the disclaimers in them) are notcontracts

consumers need not peruse disclaimers many times goingover every detail/nuance

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“Disclaimers” Key Takeaways

47

• Do not use references to “free” or “unlimited” if conditionsapply

• Include all applicable non-optional fees when consumer firstsees the advertised price

• In light of due diligence defence, have a credible complianceprogram

• Protect interests but cooperate with Bureau duringinvestigation – “shared compliance” approach to enforcement

“Online Disclaimers” Key Takeaways

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• Advertisers should design all online advertising so as tohighlight the fact that disclaimers exist and to encourageconsumers to read them

• Text prompts indicating a disclaimer should be explicit ratherthan vague – e.g., “see below for details” may not besufficient

• Advertisers should ensure that disclaimers are viewable byconsumers regardless of the technology platform they areusing

• Hyperlinks may be appropriate in some cases to showdisclaimers. If used, disclaimers should be clearly labelledand displayed in a consistent format

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49

• Carefully review any advertising & marketing claimsdelivered through electronic messages

• Avoid catchy subject lines or senders or locators

• Move catchy and/or bold advertising claims to body of emailwhere they will at least be reviewed with a materialityrequirement

• Review in isolation claims in the subject/sender line of emailsand other electronic messages


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• Audio disclaimers should be set so that volume levels andvariations in tone allow consumers to hear and understandthem

• Visual disclaimers should be displayed for a sufficientduration to ensure they can be read and understood

• It may be necessary to use audio and visual disclaimerstogether and/or repeat disclaimers several times throughoutthe online advertisement

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51


Effective Online Disclaimers – Making Fine Print Enforceable by Bill Hearn, February 28, 2017

KEY TAKEAWAYS

Using Disclaimers Generally

► Don’t try to fool consumers with disclaimers ● do use clear, simply worded disclaimers to expand on, or clarify, main claim ● don’t use disclaimers to restrict or contradict main claim

► Disclaimers should be prominent and close to main claim being expanded on or clarified ● don’t bury or hide disclaimers

► Advertisements (and the disclaimers in them) are not contracts ● consumers need not peruse disclaimers many times going over every detail/nuance

► Do not use references to “free” or “unlimited” if conditions apply ► Include all applicable non-optional fees when consumer first sees the advertised price ► In light of due diligence defence, have a credible compliance program ► Protect interests but, whenever possible, cooperate with Bureau during investigation

Using Disclaimers Online ► Advertisers should design all online advertising (be it webpages, banner ads, interesting/entertaining content, emails, text messages, short video or audio clips, items to share on social media feeds) so as to highlight the fact that disclaimers exist and to encourage consumers to read them ► Text prompts indicating a disclaimer should be explicit rather than vague – e.g., “see below for details” may not be sufficient ► Advertisers should ensure that disclaimers are viewable by consumers regardless of the technology platform they are using ► Hyperlinks may be appropriate in some cases to show disclaimers; if used, disclaimers should be clearly labelled and displayed in a consistent format ► Carefully review any advertising & marketing claims delivered through electronic messages ► Avoid catchy subject lines, senders or locators ► Move catchy and/or bold advertising claims to body of email (as opposed to the subject/sender line) where they will at least be reviewed with a materiality requirement ► Review in isolation claims in the subject/sender line of emails (because there is no materiality requirement and it likely does not matter if the claim in the subject/sender line is properly clarified in a disclaimer in the body of the email) ► Audio disclaimers should be set so that volume levels and variations in tone allow consumers to hear and understand them ► Visual disclaimers should be displayed for a sufficient duration to ensure they can be read and understood ► It may be necessary to use audio and visual disclaimers together and/or repeat disclaimers several times

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Digital Native Advertising –Distinguishing Advertising from Editorial Content

Bill Hearn, Partner, Fogler Rubinoff LLPWhat’s “Trending Now” in Digital Advertising & Marketing Law


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WHAT ARE DIGITAL NATIVE ADS?

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• Native advertising is advertising designed to look like non-advertising editorial content that is original or native to themedia (e.g., advertorials)

• Has long existed in traditional media (such as newspapers andmagazines)

• Has become prevalent in digital publications and social media

• In part is a response to consumers learning to “skip ads”

Native Advertising Generally

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• A type of ad designed to match the natural form andfunction of the digital/online platform

• Looks and feels like natural editorial content

• Behaves consistently with native user experience

Digital Native Advertising

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5

• As described in the Canadian Marketing Association’s NativeAdvertising Mini-Guide

Digital native advertising is any form of advertising thatfits naturally onto a digital page, blending into both lookand feel

It provides advertisers with the opportunity to speaknaturally with their target audience

Unlike other forms of advertising that may be somewhatdisruptive, digital native advertising gives consumersinformation or leads them to a place on the Internet(typically to shop)


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• The Interactive Advertising Bureau (IAB) has identified 6types of native ads In-feed units – online advertorials – e.g., BuzzFeed

Paid search units – presented organically in search engine results –e.g., Google

Recommendation widgets – delivers ad via a “widget” integratedinto the main well of a page – e.g., Outbrain

Promoted listings – found on sites that do not have traditionaleditorial content – e.g., Amazon

In-ad native element units – are placed outside the editorial well –e.g., OneSpot

Custom native advertisements – platform specific – e.g., Spotify


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WHEN ARE DIGITAL NATIVE ADS DECEPTIVE?

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• Main regulatory concern is when advertising is disguised asobjective editorial content that misleads and influencesconsumers to purchase a product based upon what appears tobe unbiased arms-length information (when it’s not)

• In an article entitled “Online Advertising in Canada” in itsDeceptive Marketing Practices Digest, June 2015, the Bureauexpresses concerns about “online information that is actuallyadvertising” – i.e., deceptive digital native advertising

• The online world offers consumers gateways to new sourcesof information where they can educate themselves aboutproducts and services by referring to articles and studies

Deceptive Digital Native Ads

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• This “intensely pro-consumer development” can becompletely undermined by advertisers who design online adsto look like something other than promotional material

e.g., ads disguised to look like unbiased news articles orindependent sources of information

• Advertisements that deceptively pose as arms-lengthinformation can be seriously misleading and erode confidence in the digital marketplace


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• ASC Code provides that no advertisement shall be presentedin a format that conceals its commercial intent

• Best practice is to separate editorial content from advertisingmessages in a manner transparent to the reader

• May soon see Bureau and/or ASC enforcement action in thisarea

Bureau will likely rely on deceptive electronic messagesprovisions of the Competition Act


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• See also the Word of Mouth Marketing Association(WOMMA)’s white paper Don’t Be Naïve About Native –How Marketers Should Approach Disclosure in NativeAdvertising, November 2014

• See also FTC’s Enforcement Policy Statement on DeceptivelyFormatted Advertisements, December 2015

The link itself or text surrounding the link should adviseconsumers that the content to which consumers arelinking is an advertisement


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Warner Bros. FTC Consent Order – July 2016

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SHOW MORE


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This video is sponsored by Warner Bros.

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15

No one reads this far into the description. What are you doing snooping around?

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Deceptive Digital Native Ad?

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No, here’s why …

Digital Native Advertising -Key Takeaways

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• Can take many forms with various levels of editorial control

• Consumer must always be made aware that the advertisementis, in fact, not native to the media

• Native ads will likely be considered “deceptive” if theyconvey that they are independent and impartial

• If the nature and source of the advertising content is clear,consumers can make informed decisions and give appropriateweight to the information conveyed in a native ad

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• Advertisers should be clear and conspicuous when makingmaterial disclosures

• Best to place disclosures at beginning of ad – i.e., before theconsumer engages with the ad

In front or above the headline of a native ad, ideally topleft

Also on the main page of a publisher site if there is acontent teaser

• If a video, image or graphic is the focal point of a native ad,include disclosure at the focal point


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• Include a disclosure in any links or other teasers drivingviewers to the content

• Need to make the relationship between the advertiser and themedia clear

• Use visual cues (like shading or framing) to differentiatenative from editorial content

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• “Ad”, “Advertisement”, “Paid”, “Sponsored AdvertisingContent” all likely to be understood and therefore are notdeceptive

• Best to avoid (as ambiguous or unclear):

“Promoted” or “Promoted Stories”

shorthand like “#spons”

company logos alone

• “Presented by X”, “Sponsored by X”, “Brought to you by X”is also likely not sufficient where the sponsor both pays forthe ad and influences its content


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• Disclosure of a sponsorship is required anytime an advertisercompensates or incentivizes a third party media provider tocreate content about the advertiser’s products/services, acompetitor’s products/services, or about the product/servicecategory generally

• Disclosure is not necessary when the content only includesproduct placement or otherwise does not touch on thesponsor’s business

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ADVERTYISEMENT Check out my “Canada” chapter the in International

Comparative Legal Guide to Advertising & Marketing, 2016 published by UK-based Law Business Research

If you would like a pdf copy, please contact me at [email protected] or 416.941.8805

Fogler, Rubinoff LLP’s Advertising & Marketing Practice Group


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Digital Native Advertising – Distinguishing Advertising from Editorial Content by Bill Hearn, February 28, 2017

KEY TAKEAWAYS

Digital "native advertising" is

► Advertising that looks like non-advertising, editorial content native to the media and that behaves consistently with the native user experience ► Not as disruptive as other forms of advertising and gives consumers information or leads them to a place on the Internet (typically to shop)

Using Native Ads Generally

► Can take many forms with various levels of editorial control ► Consumer must always be made aware that a native advertisement is, in fact, not native to the media ► Native ads will likely be considered “deceptive” if they convey that they are independent and impartial ► If the nature and source of the advertising content is clear, consumers can make informed decisions and give appropriate weight to the information conveyed in a native ad ► Advertisers should be clear and conspicuous when making material disclosures

Using Digital Native Ads ► Best to place disclosures at beginning of ad – i.e., before the consumer engages with the ad

● In front or above the headline of a native ad, ideally top left ● Also on the main page of a publisher site if there is a content teaser

► If a video, image or graphic is the focal point of a native ad, include disclosure at the focal point ► Include a disclosure in any links or other teasers driving viewers to the content ► Need to make the relationship between the advertiser and the media clear ► Use visual cues (like shading or framing) to differentiate native from editorial content ► “Ad”, “Advertisement”, “Paid”, “Sponsored Advertising Content” all likely to be understood and therefore not deceptive ► Best to avoid (as ambiguous or unclear):

● “Promoted” or “Promoted Stories” ● Shorthand like “#spons” ● Company logos alone

► “Presented by X”, “Sponsored by X”, “Brought to you by X” is also likely not sufficient where the sponsor both pays for the ad and influences its content ► Disclosure of a sponsorship is required anytime an advertiser compensates or incentivizes a third party media provider to create content about the advertiser’s products/services, a competitor’s products/services, or about the product/service category generally ► Disclosure is not necessary when the content only includes product placement or otherwise does not touch on the sponsor’s business

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Advertising and Phone AppsCorporate Trainers and Post-Secondary

Education

Harris Rosen, Partner, Fogler Rubinoff LLPWhat’s “Trending Now” in Digital Advertising & Marketing Law


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• On “Advertising” of private post-secondaryeducation programs of any kind, including corporatetraining programs– with an emphasis on distanceeducation and phone apps.

• Informed principally by the Private Career CollegesAct, 2005 in the context of private career collegesand ESL schools. Private degree granting rare andgoverned by another statute (Post-secondaryEducation Choice and Excellence Act, 2000).

• Deceptive Marketing Practices provisions still applyand not saved by any regulated conduct defence.

My Focus

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• “Advertising” should be defined broadly and includeadvertising through Distance Education platforms and morerecently through phone apps.

• Ontario distinguishes between pure B2B corporate trainingprograms and advertising to “members of the general public”.

• Query: are the programs paid for by corporations directly orare institutions in question trolling for individual “students”?

• If advertising is seen to be trolling for students, and nototherwise exempted (generally programs less than $1000 or40 hours, or religious programs).

• MAESD polices for false advertising in other languages.

MAESD’s (Ontario’s) View

• Consumer protection focused,

meaning student protection.

• Prevent boiler rooms and diploma mills from ripping offstudents.

• Registration requirements ensure that students do notlose time and tuition: train-out provisions and financialsecurity requirements protect against private schoolclosures.

• Ensure that “vocational” training providers live up tostandards.

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Mandate of PCCA, 2005

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Advertising Restrictions PCCA, 2005

• “Advertising” and “Offering” vocationalprograms without being registered are separateoffences.

• Administrative Monetary Penalties can be severeand roll over daily if unremediated.

• Largest fine ever ($250,000) went to person whomerely advertised and never offered theprogram.

• Superintendent has other weapons such asstatutory restraining order.

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Advertising Restrictions, PCCA 2005 continued

• Can’t advertise a private career college without beingregistered (11(1)).

• Can’t advertise vocational program if you are not a registrantprivate career college and program has not been approved bySuperintendent (11(2)).

• Can’t solicit students to enrol into “vocational” program if notregistrant (11(3).

• Can’t hold yourself out as “private career college” or anyderivation/abbreviation of the term unless you are (11(4)).

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Distance Education Platforms

• Virtually all post-secondary institutions

offer Distance or Online Education Programs.

• Superintendent can make Policy Directives that have the forceof law. Distance Education Directive.

• http://www.tcu.gov.on.ca/pepg/audiences/pcc/directive9.pdf :To provide unexempted vocational training online you must

Be in business three years as a registered PCC.

Financial viability.

20% of program must be offered through face to facelearning.

Online learning systems available 24 hours/day.

Trouble-shooting support, etc.

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Phone Apps

• Definition: application software designed to run on a mobiledevice, such as a smartphone or tablet computer.

• Mobile applications frequently serve to provide users withsimilar services to those accessed on PCs.

• Recently used to target enrollees for private post-secondaryinstitutions.

Example: working caregivers don’t have access totelevision or PC based internet in places like Hong Kongand Philippines, but always have their phones with them.Personal Service Worker programs in Canada targetingthem through phone apps.

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Problems with Phone Apps and Distance

Education Platforms• Borderless apps target “international students” searching for a

better future.

• A recipe for passing off: hundreds of institutions with IvyLeague names: designed to confuse.

• Phone Apps still off the radar screen of provincial regulators?

• A recipe for false promises through quick “hooks”:

Promise of better life

More Income

Credential to be obtained in unrealistic time frame: “be anurse in 10 days”…

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Advertising and Phone Apps: Corporate Trainers and Post-Secondary Education by Harris Rosen, February 28, 2017

KEY TAKEAWAYS

Private Post-Secondary Education Includes ● Private Career Colleges ("vocational" training institutions regulated under PCCA, 2005) ● Private Degree Granting Institutions (Rare, requires Ministerial Consent and regulated under

PSECEA). ● Corporate Training Institutions (generally unregulated by PCCA, 2005 unless they run afoul of

the registration requirements by advertising or offering vocational programs to members of the general public).

● ESL/Language Schools. ● Not-for-Profit institutions involved in training of post-secondary students (regulated by PCCA,

2005 to the extent that they provide vocational programs). Advertising Restrictions under the PCCA, 2005, and Administrative Monetary Penalties ("AMP's") Can Unknowingly Snag ● Any of the groups engaged in the provision of post-secondary programs and offend the

advertising prohibitions of the PCCA, 2005. ● Those who offer programs with a "vocational" aspect that can be traced to an identifiable NOC

Code e.g. Nursing, Denturism, Personal Service Worker, Registered Massage Therapy, etc. ● Persons who are advertising or offering vocational programs through Distance Learning or Phone

Apps. ● Persons who are advertising vocational programs or credentials, without being a registrant

institution or registrants who are advertising unapproved vocational programs. ● Anyone engaged in deceptive marketing to students or prospective students through any mode of

transmission. Before Advertising Post-Secondary Programs You Should ● Pre-screen programs before you run them, even if you are not a registrant (can be done

anonymously through FR, to MAESD). ● Determine whether your claim is false or deceptive in any way whatsoever? (claims relating to

relevant employment, claims relating to entry level incomes, etc.). ● Train staff to ensure they understand the exemption limits, if you are running exempted post-

secondary programs with any vocational aspect. ● Not assume that mode of transmission (phone app or PC) of an advertisement will insulate you

from liability. ● Carefully consider whether you wish to run programs that attract prospective students, versus

B2B training programs that is exclusively third party funded by the corporation/organization.

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Online Influencers and Reviews: Disclosing Material Connections

Ashlee Froese, Partner, Fogler Rubinoff LLPWhat’s “Trending Now” in Digital Advertising & Marketing Law


TABLE OF CONTENTS

Part 1: Influencers

Part 2: Testimonials

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PART 1: INFLUENCERS

RISE OF A NEW COMMODITY

Likes Shares- AND -

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INFLUENCERS

Kim Kardashian

Twitter: 50 million

Instagram: 92.2 million

Sarah Fisher

Twitter: 43,300

Instagram: 60,000

JetSet Justine

Twitter: 16,400

Instagram: 120,000

Lisa Tant

Twitter: 38,200

Instagram: 14,100

Jay Strut

Twitter: 27,000

Instagram: 56,3000

RECENT DEVELOPMENTS

Interpretation Guideline:

Clause 7 of ASC Code

Provides guidelines on testimonials, endorsement and review

Must disclose material

connection between endorser, reviewer, influencer

Except when material

connection is one consumers

would reasonably

expect to see

If material connection

exists fact and nature must be

clearly, prominently disclosed in

close proximity to

representation

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Clause 7:

Testimonials, endorsements or other representations of opinion or preferencemust reflect the genuine, reasonably current opinion of the individual(s), group ororganization making such representations, must be based upon adequateinformation about or experience with the identified product or service and must nototherwise be deceptive.

Canadian Code of Advertising Standards

BOTTOMLINE

1(b) cannot omit relevant information if it makes the advertisement deceptive/misleading

1(c) all pertinent details of advertisement must be clearly and understandably stated

2 cannot present advertisement in a way that conceals that it is an advertisement

Canadian Code of Advertising Standards

• Need to differentiate between (1) organic promotion and (2) sponsored/paidadvertisement

• Material connection must be apparent• Also applicable to teaser advertisements

5

MATERIAL CONNECTION

any connection between an entity providing a product or service and an endorser, reviewer, influencer or person making a representation that may affect the weight or credibility of the representation, and includes: benefits and incentives, such as monetary or other compensation, free products with or without any conditions attached, discounts, gifts, contest and sweepstakes entries, and any employment relationship, but excludes nominal consideration for the legal right to identify publicly the person making the representation.

“Material Connection” definition

MATERIAL CONNECTION

Must disclose relationship with advertiser and influencer

Employment/contractual relationship

Free products/samples

Exclusive offers/access

Incentive to blog

6

WHAT CONSTITUTES DISCLOSURE

Clear and conspicuous

Disclose at beginning of post

#ad, #sponsored, #paid, #contest,

#prize, #Igotitfree

Consumers must recognize

disclosure of material connection

PART 2: TESTIMONIALS

7

RECENT DEVELOPMENTS

Interpretation Guideline:

Clause 7 of ASC Code

Provides guidelines on testimonials, endorsement and review

Must disclose material

connection between endorser, reviewer, influencer

Except when material

connection is one consumers

would reasonably

expect to see

If material connection

exists fact and nature must be

clearly, prominently disclosed in

close proximity to

representation

ASTROTURFING

Identifying online reputation by creating positive reviews that do not originate from consumer

Comments/reviews/false likes/ online or offline sponsored activity

8

COMPETITION BUREAU

Specifically addresses astroturfing

In Competition

Bureau’s “The

Deceptive Marketing Practices Digest”

Notice an increase in

this deceptive marketing practice

Aimed to boost own ratings or

lower competitors

ratings

Incentive employees

Hire reputation

management firms

BELL CANADA

November 2014 -Bell encouraged

employees to post positive reviews and ratings for the Bell and Virgin apps on

iTunes App Store and Google Play store

Employees did without disclosing

they were employees

Bell pre-emptively removed reviews and

ratings

Reviews/ratings created general

impression that they were made by

independent/impartial consumers and

temporarily affected overall star rating for

apps

• Committed not to direct, encourage or incentivize its employees/contractors to rate, rank, review apps

• Enhance/maintain corporate compliance program with focus on guaranteeing against astroturfing• Penalty $1,250,000

Consent Agreement

9

BEST PRACTICE

Testimonials must reflect real experience

Disclose material connection

Don’t use full names/social media

handles without legal approval

Use current and relevant

testimonials

Don’t add/truncate testimonials

Don’t rely on outliers

Disclaimer: This presentation contains general information only and does not constitute legal advice. Qualified legal counsel should be consulted to assess the application of laws to specific

facts.

18

Strategies to Manage Influencers and Testimonials

by Ashlee Froese, February 28, 2017

KEY TAKEAWAYS

1. General Guidelines Interpretation Guideline for Clause 7 of ASC Code issued in October 2016.

Provides guidelines on testimonials, endorsement and review Must disclose material connection between endorser, reviewer, influencer Except when material connection is one that consumers would reasonably expect

to see If material connection exists, fact and nature must be clearly, prominently

disclosed in close proximity to representation Material Connection

Definition: "any connection between an entity providing a product or service and an endorser, review, influencer or person making a representation that may affect the weight or credibility of the representation, and includes: benefits and incentives, such as monetary or other compensation, free products with or without any conditions attached, discounts, gifts, contest and sweepstakes entries, and any employment relationship, but excludes nominal consideration for the legal right to identify publicly the person making the representation"

2. Guidelines to Effectively Manage Influencers Best Practice

Must disclose relationship with advertiser and influencer including employment/contractual relationship, free products/samples, exclusive, offers/access, incentive to blog

What constitutes Disclosure Clear and conspicuous Wise to disclose at beginning of post Sample hashtags: #ad, #sponsored, #paid, #contest, #prize, #igotitfree Consumers must recognize disclosure of material connection

3. Guidelines to Effectively Manage Testimonials Astroturfing

Identify online reputation by creating positive reviews that do not originate from consumer

comments/reviews/false likes/online or offline sponsored activity Best Practice

Testimonials must reflect real experience Disclose material connection Do not add/truncate testimonials Use current and relevant testimonials Do not rely on outliers

1

[Presentation Title Goes Here – Type it in the Master Slide]0

HOW THE U.S. FTC REGULATES DIGITAL NATIVE ADVERTISING AND ONLINE INFLUENCERS – LESSONS FOR CANADIAN ADVERTISERS

Tuesday, February 28, 2017

Allison Fitzpatrick

PartnerAdvertising, Marketing & Promotions 212.468.4866 [email protected]@AllisonFitzpat1

© 2017 Davis & Gilbert LLP

FTC ENDORSEMENTS AND TESTIMONIALS

»In 2009, the FTC revised its Endorsement and Testimonial Guides

»FTC has long held that “material connections” (e.g., payments or free products that the consumer would not expect) must be disclosed

»Applies to blogs and social media

1 How the U.S. FTC Regulates Digital Native Advertising and Online Influencers – Lessons for Canadian Advertisers

2

ENDORSEMENTS AND TESTIMONIALS

»Endorsements and testimonials are a common tool of advertisers in social media

- Celebrity tweets

- Bloggers / influencers / word-of-mouth marketers

- Employees promoting their employers’ products in social media


WHEN TO MAKE A DISCLOSURE IN SOCIAL MEDIA

»If a famous athlete has thousands of followers on Twitter and is a well-known spokesperson for Company X, is a disclosure necessary?

- Depends on whether his / her readers understand that he / she is being paid to endorse a product

- Disclosure is necessary if a significant number of readers do not know the celebrity is a paid spokesperson


3

KIM KARDASHIAN AND CARL’S JR.

»“I want to clear this up because there has been a lot of talk about this. Carl’s Jr. did not pay me to Tweet about their salads. Yes, obviously I was paid to be in the commercial … we all have to work! But I was not paid to Tweet or talk about the salads on my blog, Facebook account, MySpace account or any other online outlets. Am I not allowed to talk about something I like without people assuming I must have been paid to do it?”


Managing the Legal and PR Risks in Social Media5

4

HOW TO MAKE A DISCLOSURE IN SOCIAL MEDIA

»There is no special language but the goal is to effectively communicate your relationship with the marketer

- Acceptable

• “Company X gave me this product to try …”

• “Some of the products I’m going to use in the video were sent to me by Company X.”


FTC’S FAQS REGARDING SOCIAL MEDIA DISCLOSURES

»YouTube and online videos require disclosures in the beginning of the video and multiple disclosures throughout depending on length

»Twitter disclosures

- #Ad

- #Paid or #Paid Ad

- #Sponsored but not #spon

- Promotions: #contest or #sweepstakes but not #sweeps


5

HOW TO MAKE A DISCLOSURE

How the U.S. FTC Regulates Digital Native Advertising and Online Influencers – Lessons for Canadian Advertisers

8

FTC ACTIONS

6

FTC ACTION: IN THE MATTER OF LORD & TAYLOR

Social Media –Can You Win in Court AND in the Court of Public Opinion?

11

7

IN THE MATTER OF LORD & TAYLOR

»Last year, Lord & Taylor provided 50 influencers with the same dress, and paid them to post pictures of themselves wearing the dress on Instagram

»Lord & Taylor also paid Nylon magazine to run a seemingly editorial article about the dress

»The campaign reached over 11.4 million Instagram users, and the dress quickly sold out

»Neither the posts nor the article disclosed that they were paid sponsorships

»The FTC brought an enforcement action against Lord & Taylor, which was settled in March of 2016, and resulted in onerous monitoring and reporting obligations for the retailer

NATIVE ADVERTISING: FTC ENFORCEMENT POLICY AND BUSINESS GUIDANCE

»In Dec. 2015, the FTC issued guidance on native advertising, or content that bears a similarity to the news, feature articles, entertainment, and product reviews

»General Rule: Where consumers may be misled about the source of an advertisement in a way likely to affect the consumers’ choices or conduct with respect to the advertised products, clear, proximate and prominent disclosures are needed

How the U.S. FTC Regulates Digital Native Advertising and Online Influencers – Lessons for Canadian Advertisers

13

8

FTC ENFORCEMENT POLICY AND BUSINESS GUIDANCE

»Consumers must be aware content is sponsored before making the decision to view it; the FTC will consider “net impression” and will regulate “deceptive door openers” that mislead consumers as to the source of the content

»Guidance applies not only to advertisers but to all parties creating the advertising (e.g., ad agencies)


MAKING DISCLOSURES BASED ON THE FTC GUIDANCE

»In general, disclosures should be- In clear and unambiguous language (logos alone are

not sufficient)- As close as possible to the native ads to which they

relate- In a font and color that is easy to read- In a shade that stands out against the background- For video ads, on the screen long enough to be noticed,

read, and understood- For audio disclosures, read at a cadence that’s easy for

consumers to follow and in words consumers will understand


9


»How to make a disclosure

- Ad

- Advertisement

- Paid advertisement

- Sponsored advertising content

»Advertisers should not use ambiguous terms such as “Promoted” or Promoted Stories” or company logos

»Advertisers should use consistent terminology



»The following disclosures may be acceptable when the advertiser has funded or underwrote the content but did not create or influence the content

- Presented by

- Brought to you by

- Promoted by

- Sponsored by


10



Native Advertising – Recent Developments19

11

20 From Arenas to Zooey: Recent Attempts to Expand Right of Publicity Claims

20 The Basics of Advertising & Marketing Law20

QUESTIONS?

Allison Fitzpatrick

PartnerAdvertising, Marketing & Promotions 212.468.4866 [email protected]@AllisonFitzpat1

© 2017 Davis & Gilbert LLP

1812371.1 07503-9999-000

KEY TAKEAWAYS

“How the United States FTC Regulates Digital Native Advertising and Online Influencers: Lessons for Canadian Advertisers”

February 28, 2017

FTC Endorsement and Testimonial Guides

The FTC has long held that “material connections” (e.g., payments or free products that the consumer would not expect) must be disclosed

In 2009, the FTC made clear that its Endorsement and Testimonial Guides apply to blogs, social media and influencer marketing

How Can Influencers Make FTC-Compliant Disclosures?

There is no special language but the goal is to effectively communicate the influencer’s relationship with the advertiser

YouTube and online videos require disclosures in the beginning of the video and multiple disclosures throughout, depending on length of the videos

The FTC understands that Twitter presents certain space-constraints so disclosure can be made via hashtags, such as #Ad, #Paid, #Paid Ad, #Sponsored but not #spon

Disclosing Native Ads

In December 2015, the FTC issued guidance on native advertising, or content that bears a similarity to the news, feature articles, entertainment, product reviews, and other material that surrounds it online

Where consumers may be misled about the source of an advertisement in a way likely to affect the consumer’s choices or conduct with respect to the advertised products, clear, proximate and prominent disclosures are needed

Consumers must be aware content is sponsored before making the decision to view it; the FTC will consider “net impression” and will regulate “deceptive door openers” that mislead consumers as to the source of the content

Disclosures can be made by the following terms: Ad, Advertisement, Paid Advertisement, Sponsored Advertising Content

If the advertiser funds or underwrites the content but did not create or influence the content, the following terms may be acceptable: Presented by, Brought to you by, Promoted by, or Sponsored by

For more information, please contact: Allison Fitzpatrick, Davis & Gilbert Advertising, Marketing & Promotions Partner, at [email protected] or 212.468.4866.

mailto:[email protected]

1

Wrap Up



1

2

Thank You

Yadira Flores

[email protected]

Ashlee Froese

[email protected]

Bill Hearn

[email protected]

Young Park

[email protected]

Harris Rosen

[email protected]

Ravi Shukla

[email protected]


[email protected]

1

For more information on our Advertising & Marketing Law Group, please visit our website at foglers.com or contact any of the seminar presenters listed below:


www.foglers.com


http://foglers.com/lawyers/yadira-flores

http://foglers.com/lawyers/harris-rosen


http://foglers.com/lawyers/ashlee-froese


http://foglers.com/lawyers/ravi-shukla






http://foglers.com/lawyers/young-park
