Canada: The Web: An Extraordinary Promotional Tool For Those Who Know How To Use It - Some Legal Highlights

Last Updated: June 25 2001
Article by Severine Biderman

Today the Internet appears to be an ideal way to conduct business, due to its flexibility, international scope and interactivity. This relatively new market tool implies however that certain legal language be used by those persons who wish to operate a web site for the purpose of introducing a business, products and services, doing business "on-line" or reinforcing their presence on the international scene while avoiding legal problems at the same time.

  • This problem is even further complicated and delicate as one must consider the applicability and effect of foreign laws, rules and protocols which are still being elaborated and re-defined to deal with current realities.
  • The aim of this series of "Communiqués" is to extend some practical legal advice on important issues to those persons who wish to successfully construct and exploit a web site in order to see it bears fruit.
  • In this first instalment, we shall deal with certain elementary questions which deal with the construction of a web site, in a general sense.

Where To Locate Domicile : Choice And Availability Of A Domain Name

  • The choice and availability of a domain name is paramount and the obvious starting point. As you know a domain name is a unique address by which a web site is accessed and is the primary identifier of the Internet user. In order to avoid disputes involving your choice of domain name, the domain name which you seek to register must not infringe upon the prior rights of another person using a similar or identical trade mark, trade name or generally any words or symbols which are distinctive and which benefit from the protection afforded by law. Many domain name registrars exercise little if no initial control over the application process, including the selection of a domain name, and apply the principle "first come first served" in allowing the registration of domain names. The validity of the domain name registration can always be challenged by the owner of a pre-existing right in and to such name.
  • It is also advisable to register the domain name chosen with all other extensions available, namely ".com", ".net", ".org" and if possible extensions corresponding to geographic regions denoted by, for example ".ca" for Canada ".fr" for France and ".uk" for Great Britain. These geographic top level domain names and the particulars governing them were discussed in our previous "Communiqués" which are accessible from our website.
  • It is noteworthy that seven (7) new Top Legal Domains ("TLDs") should be available by this summer. These new TLDs are ".aero" for air-transport industry, ".biz" for business, ".coop" for cooperatives, ".info" for unrestricted general use, ".museums" for museums, ".name" for individuals and ".pro" for accountants, lawyers, physicians and other professionals. We recommend that your trade marks or trade names be registered with each and every relevant TLD as soon as they become available in order to avoid potential cybersquatting conflicts.
  • It is important to remember that the mere registration of a domain name does not, in and of itself, confer any specific protection to the applicant. We would therefore recommend that such domain name be protected through registration of a trade mark, to the extent that it is being used in connection with the sale of wares or the provision of any services and that it is available for protection under existing trade mark laws.

Linking : The Choice Of Keyword Metatags

  • In order to expand the number of visitors to your web site and consequently the goodwill associated with your enterprise, the visibility of your web site is essential.
  • This visibility will necessarily be heightened by availing yourself of an indexation strategy which uses keywords or metatags.
  • A metatag is a search string keyword which is incorporated into a web page and which permits automatic referencing of a web page by search engines such as, for example, "Yahoo!" or "La Toile du Québec". Essentially, metatags are used as a mean of directing internet users, who are seeking information on a selected topic, to web sites offering such information.
  • The choice of such metatags or keywords is as important as the choice of your domain name. In essence, the more general these words are, the greater is the potential for your web site to be confined to being one of many thousands of possible responses to a search request. On the flipside, if the metatag is overly specific, the search results could prove to be negative in the sense that the internet user may not have searched for specific information using such narrow keywords.
  • Recent case law, which is predominantly American, acts as a constant reminder that use of a competitor's trade mark as a metatag is illegal. Such conduct could constitute unfair competition, the passing off of a trade mark or an illegal appropriation of clientele. This would also be the case where two independent entities are using similar trade marks to promote similar business activities. However, in most instances, similar names may be used as keyword metatag if they are words of a common meaning without any distinctive quality. In sum, it is important to put in place a firm policy relating to "keywords" which conform to both intellectual property laws and competition laws.

Interactivity : Links To Other Sites Or Hyperlinks

  • The setting up of external hypertext links, namely linkages which give access to web sites other than your own, can raise certain issues relating to liability as well as to intellectual property rights.
  • In effect, in passing from one web page to another, the new web page which appears on the screen may continue to reference distinctive elements found on the first site consulted, such as logos, distinctive colours or trade marks. Consequently, retention of the same frame when passing from one web site to another can induce the user into error as to the origin of products or services and as such can trigger your liability. For example, this may occur where your products are presented on a web page simultaneously with the trade mark of another company. Moreover, you would not wish to see your liability engaged as a result of illegal content which has been posted on the web site of another person.
  • Therefore, insofar as hypertext links are concerned, you should limit your liability by incorporating, onto your web site, an explicit legal notice delineating your responsibility and you should conclude, if possible, written contracts governing those hyperlinks established with owners of the other web sites involved.

The Language Used : Use Of The French Language

  • The most widely used practice today is to offer visitors of your web site a choice of language to be used. This being said however, the use of French is obligatory in certain instances.
  • The "Office de la langue française" (the "Office") is of the view that commercial advertising posted on a web site falls within the purview of the Charter of French Language (R.S.Q. c.C-11). For example, the Office has determined that a French version of all advertising found on a web site must be made available if the host of the web site is a company located in Quebec whose products are available in Quebec.
  • According to the Office "a company which does not have its head office, place of business or business address in Quebec cannot be compelled, under Quebec laws, to use French on its web site". The criteria of the Office currently used in Quebec to determine the situs of a business is the place of business of the company and not the place where its internet server is located.
  • The restrictions imposed by the Charter of French Language likely apply to all forms of commercial advertising for wares or services posted by any person or entity having a place of business in Quebec.
  • Finally, we would recommend that your legal notice, as well as the general terms and conditions for use of your web site, specify the official language of your web site and alert users to the fact that there may be significant differences between this "official language" and any translations which you provide.

Governing Laws : A Question Of Choice

  • The matter of whose laws are applicable to a web site has been the subject of many controversial debates. Some jurists advance the theory of "emission" in virtue of which the law applicable to the site would be that of the territory where the web server is located. Other jurists would like the theory of "access" to prevail in which the place from which the web site is accessed would suffice to determine applicable law; therefore, in view of the international nature of the internet, any jurisdiction can declare itself competent to hear a case and apply its laws.
  • Finally, the Canadian Courts seem to follow a "real and substantial connection" test, in an attempt to synthesize the other theories mentioned above. This test applies a set of criteria in order to establish the jurisdiction "with which the transaction has its closest and most real connection".
  • In any event, until such time as there is a consensus reached on this question, it would be prudent for you to specify a choice of law by indicating that the use of the web site, as well as any contractual relations entered into as a result thereof, are to be governed by the laws of a designated jurisdiction.
  • In this regard, we would suggest that a legal notice to this effect appear on the home page of your web site (as it is the consumers' first contact with your web site) and also on all on-line documents produced by or visible from the web site, most particularly, in any general conditions for the sale of any of your products or services.

Computers And Freedom To Act : The Collection And Transmission Of Personal Information

  • In operating a web site, you will undoubtedly be required to administer files containing personal data. This would be the case if you contemplated using software which permits multiple users to communicate with each other on-line. Additionally, you may ask visitors to your site to complete information questionnaires and you may wish to send communications to your clients (or more generally to any visitor to your site) in order to compile personal information so that the specific interests of your customer can be targeted by you.
  • The notion of what constitutes personal data is very broad and encompasses the names of individuals as well as all coordinates or personal information which facilitate or permit the identification of these persons such as addresses, telephone numbers, electronic addresses and even their interests or preferences. Use of this personal data cannot be made unless you ensure that such use conforms to all applicable laws governing an individual's right to privacy.
  • In this regard, many countries, provinces or other territories have, as was already done in Québec, adopted laws and regulations governing the collection and use of personal data. In fact, in January 2001, the Parliament of Canada adopted Bill C-6 known as the "Personal Information and Electronic Documents Act" (the "Federal Legislation"). The aim of the Federal Legislation is to establish rules governing the collection, use and divulgation of personal information with a view to balancing the privacy rights of enterprises against the need for businesses to collect, use and communicate personal data in their day to day business activities.

Notification For The Consumer : Integrating Legal Notices

  • A legal notice serves a variety of purposes : it informs, delineates the liability of the parties concerned and facilitates the making of proof. Any user of your web site should be advised in writing of the conditions of use of your site and should be clearly notified of any rights which you enjoy to the materials displayed on your site as well as in the products and services offered to them (i.e. copyright, trade marks, patents, etc.). Careful delineation of the conditions of use of a given web site will no doubt have a preventive effect: that of reducing the potential for (i) conflict between vendors and consumers; and for (ii) infringement of intellectual property rights. It should also lead to the smooth resolution of disputes within agreed upon parameters.
  • Should litigation arise which stems from the use of a web site, the legal notice will go a long way towards establishing the ownership rights of the web site owner, the priority of these rights and the owner's intention to continuously exploit them. It will also serve to deter the "visitor" of a web site from invoking the owner's renunciation or waiver of rights.
  • The proper placement of this legal notice is essential so as to ensure that the notice is clearly brought to the attention of the web site visitor and accepted by such visitor before permission to proceed is granted. The notice should appear on the home page of the web site as well as every other visible web page so that one can only advance further by clicking on an icon described as "legal notice".

As indicated above, such notice should specifically mention the following :

  1. A clear notification of intellectual property rights such as :
  1. trade marks associated with a given product or service; and
  2. copyrights benefiting the web site itself, accompanied by a notice which prohibits the unauthorized reproduction of all or any part of the contents of the site;
  1. information regarding links between your web site and others together with a disclaimer of liability in connection with the content or substance of those sites which may be accessed through these links; and
  2. the choice of law which will govern the parties.

In the interim, we invite you to communicate with us should you require any additional information related to the operation of a web site or should you require the preparation of any of the contracts or legal notices related thereto. We would also be pleased to advise you on any matters relating to intellectual property rights and the protections associated with this right.

Our "Communiqué" aims to bring to your attention the contemporary legal issues which we believe are and should be of interest to the business community and under no circumstances is it to be considered to be a legal opinion.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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