Developments in Information Technology Law

Canada is one of the "most connected countries in the world" and it is estimated that
Canadian e-commerce will grow to over CND$150 billion ( £65 billion) by 2004.

(Industry Canada: http://strategis.gc.ca)

The recent developments in information technology law in Canada include a government initiative to harmonize online consumer contacts, two significant court decisions, and proposed rules for the resolution of disputes involving the Canadian top-level domain name (".ca").

THE INTERNET SALES CONTACT HARMONIZATION TEMPLATE

In May 2001, the Internet Sales Contract Harmonization Template ("Template") was approved by the federal, provincial and territorial ministers responsible for consumer affairs in Canada. The Template was created to assist provinces and territories in drafting e-commerce consumer protection legislation and to ensure that the new legislation is fundamentally the same across the country. Although the Template is meant to apply to all consumer e-commerce contracts, the enacting province or territory will determine the actual scope of the legislation.

Disclosure Requirements:

The supplier must provide the consumer with specific information such as an accurate description of the goods or services, an itemized list of the prices and costs and the total cost, in a form that can be retained and printed.The supplier must also provide the consumer with an express opportunity to accept or decline the contract and to correct errors. This is in addition to the supplier's obligation to provide the consumer with a copy of the contract, in written or electronic form, within 15 days after the contract is entered into. The contract can be delivered in any manner so long as the supplier can provethat the consumer has received a copy.

Cancellation Periods:

The consumer may cancel the contract within certain specified periods set out in the Template.

Credit Card Charge-Back:

A consumer may ask the credit card issuer to cancel or reverse charges where the contract has been cancelled and the supplier has not given the consumer a refund within 15 days.Once requested, the credit card company must cancel or reverse the relevant charge and any associated interest.

RECENT CASE LAW

Pro-C Ltd. v. Computer City Inc., [2001] Ontario Court of Appeal

This case involved an action by Pro-C against Computer City for trade-mark infringement.Pro-C had registered a domain name and owned a registered trademark in Canada.Computer City marketed computers under the same name through retail stores in the United States and advertised through the company's website.Pro-C claimed that Computer City's use of this mark over the Internet resulted in a high number of potential Computer City customers coming to the Pro-C website, which caused its website to crash.Pro-C sued for trade-mark infringement in Canada. The Ontario Court of Appeal found that simply advertising wares on a passive Internet site does not constitute "use" of a trade-mark in Canada within the meaning of the Canadian Trade-marks Act ("Act").

British Columbia Automobile Association v. Office and Professional Employees' International Union, Local 378, [2001] B.C.S.C.

This case involved claims by an employer, B.C. Automobile Association ("BCAA"), for copyright infringement, passing-off, and trade-mark violation against a union representing its employees.During a labour dispute, the union published a website, which was quite similar to that of BCAA.The union used BCAA's trade-marks in one of its domain names (www.bcaaonstrike.com) and meta-tags. Faced with objections from BCAA, the union redesigned its website twice. The court found that the first two websites constituted copyright infringement and passing-off and awarded BCAA nominal damages.The court found that the third website, that continued to use the BCAA name in the meta-tags, did not infringe. The court found that:

Standard principles of copyright apply to web pages, which are protected as artistic works within the meaning of the Copyright Act, provided they are sufficiently original.
To give rise to an action under the Trade-marks Act, there must be a commercial element to the conduct.Union activity is not a commercial use.
A union site using the employer's trade-name as part of its URL and meta-tags copied directly from the employer's HTML code did not constitute passing off where there is no possibility of confusion as to source or affiliation.

NEW DISPUTE RESOLUTION POLICY AND RULES FOR .CA

The Canadian Internet Registration Authority (&quotCIRA&quot:) which took over responsibility for .ca in 2000, published a dispute resolution policy and rules for public comment in September, 2001.The proposed policy and rules are similar to those of the Internet Corporation for Assigned and Numbers (&quotICANN&quot).However, there are some significant differences:

complaints must be based on specific &quotrights&quot as defined in the policy;
the complainant must show the registrant registered the domain name in bad faith and has no &quotlegitimate interest&quot as defined in the policy; the complainant need not show bad faith use of the domain name;
all complaints will be heard by a 3-member panel, unless the parties agree to a single arbitrator; and
all panel decisions will be published.

CIRA was formed as a result of the decision to open up the .ca domain.Under the new rules, it has become relatively easy to register a .ca domain name as long as a registrant can meet Canadian Presence Requirements (see: http://www.cira.ca/en/doc_Registration.html).One of the ways a foreign company can meet the Canadian Presence Requirements is by having a registered trademark in Canada.The domain name must be exactly the same as the word components of the registered trademarks.

Contact Amy-Lynne Williams for more information on the legal issues surrounding e-commerce.

Disclaimer: This Newsletter is intended to provide readers with general information on legal developments in the areas of e-commerce, information technology and intellectual property. It is not intended to be a complete statement of the law, nor is it intended to provide legal advice. No person should act or rely upon the information contained in this newsletter without seeking legal advice.

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