Branding Boldly!The Latest Developments in Advertising & Marketing Law              and Their Impact on Canadian Franchisi...
Overview• What are the advertising & marketing law implications for  franchises of the following developments in 2012?   ...
Dunkin’ Donuts Case -Brand Protection and Promotion                                 3
.    4
Dunkin’ Donuts• Dunkin’ case on “brand protection” was decided under  Civil Code of Quebec on special facts - will the cas...
Dunkin’ Donuts• Will Ontario courts, specifically, interpret ‘good faith and  fair dealing’ under Wishart to include a dut...
Dunkin’ Donuts• Does a Franchisor have a positive duty to protect its  franchisees against significant competition by anot...
Dunkin’ Donuts• Could Franchisors now be forced to act as guarantors or  insurers of success by their Franchisees?        ...
Dunkin’ Donuts• Did Dunkin’s degree of neglect and negligence largely  contribute to the Quebec court’s finding of liabili...
Tim Hortons Case -Price Maintenance under Competition Act                                          10
Price Maintenance                    11
Time Case -     “General Impression” Test       and Use of Disclaimersin Advertising under Competition Act                ...
Disclaimers - Rules of Thumb                               13
Disclaimers – This is 7 point fontSee The Pit.org - Standard Disclaimer This product is meant for educational purposes onl...
Disclaimers - The Subscription Trap                                      15
Disclaimers - The Average Consumer                                     16
Disclaimers - Richard v. Time                                17
Disclaimers - Hearn v. Time ?                                18
Disclaimers in Action                        19
Disclaimers - Think Like a Comedian?                                       20
OQLF’s New Policy on Charter of the         French Language -    Exterior Store Signage in Quebec                         ...
Franchise Agreement -Sample Trade-mark, Advertising & Marketing                Provisions               (Appendix I)      ...
Trade-mark Clauses• Registration of Mark by Franchisor• Licensing and use of Mark by Franchisee• Signage in Store (s.50(2)...
Advertising & Marketing Clauses• Local Advertising by Franchisee• Establishment of Fund by Franchisor for regional and  na...
Protect & Enhance System ClauseThe following clause is an initial attempt to deal with the Dunkin’Donuts case as it relate...
Thank YouJohn Chimienti, Canadian Tire Corporationjohn.chimienti@cantire.com416.480.3680Bill Hearn, Davis LLPbhearn@davis....
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Latest Developments in Advertising and Marketing Law and Their Impact on Canadian Franchising

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Originally presented at the Canadian Franchise Association’s Annual Law Day Conference on January 31, 2013.

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Latest Developments in Advertising and Marketing Law and Their Impact on Canadian Franchising

  1. 1. Branding Boldly!The Latest Developments in Advertising & Marketing Law and Their Impact on Canadian Franchising John Chimienti, Canadian Tire Corporation Bill Hearn and John Rogers, Davis LLP Presentation to Canadian Franchise Association Toronto, January 31, 2013
  2. 2. Overview• What are the advertising & marketing law implications for franchises of the following developments in 2012?  Dunkin’ Donuts case on brand protection and promotion  Tim Hortons case on price maintenance  Time case on general impression and disclaimers in ads  OQLF’s policy on Charter of French Language and store signs in Quebec• What should the advertising & marketing law provisions in franchise agreements say given these developments? 2
  3. 3. Dunkin’ Donuts Case -Brand Protection and Promotion 3
  4. 4. . 4
  5. 5. Dunkin’ Donuts• Dunkin’ case on “brand protection” was decided under Civil Code of Quebec on special facts - will the case be applied in English Canada? 5
  6. 6. Dunkin’ Donuts• Will Ontario courts, specifically, interpret ‘good faith and fair dealing’ under Wishart to include a duty by the Franchisor to protect and promote the brand? 6
  7. 7. Dunkin’ Donuts• Does a Franchisor have a positive duty to protect its franchisees against significant competition by another franchise system? 7
  8. 8. Dunkin’ Donuts• Could Franchisors now be forced to act as guarantors or insurers of success by their Franchisees? 8
  9. 9. Dunkin’ Donuts• Did Dunkin’s degree of neglect and negligence largely contribute to the Quebec court’s finding of liability against it? 9
  10. 10. Tim Hortons Case -Price Maintenance under Competition Act 10
  11. 11. Price Maintenance 11
  12. 12. Time Case - “General Impression” Test and Use of Disclaimersin Advertising under Competition Act 12
  13. 13. Disclaimers - Rules of Thumb 13
  14. 14. Disclaimers – This is 7 point fontSee The Pit.org - Standard Disclaimer This product is meant for educational purposes only. Any resemblance to real persons, living or dead is purely coincidental. Void where prohibited. Some assembly required. List each check separately by bank number. Batteries not included. Contents may settle during shipment. Use only as directed. No other warranty expressed or implied. Do not use while operating a motor vehicle or heavy equipment. Postage will be paid by addressee. Subject to CAB approval. This is not an offer to sell securities. Apply only to affected area. May be too intense for some viewers. Do not stamp. Use other side for additional listings. For recreational use only. Do not disturb. All models over 18 years of age. If condition persists, consult your physician. No user-serviceable parts inside. Freshest if eaten before date on carton. Subject to change without notice. Times approximate. Simulated picture. No postage necessary if mailed in the United States. Breaking seal constitutes acceptance of agreement. For off-road use only. As seen on TV. One size fits all. Many suitcases look alike. Contains a substantial amount of non-tobacco ingredients. Colors may, in time, fade. We have sent the forms which seem right for you. Slippery when wet. For office use only. Not affiliated with the American Red Cross. Drop in any mailbox. Edited for television. Keep cool. process promptly. Post office will not deliver without postage. List was current at time of printing. Return to sender, no forwarding order on file, unable to forward. Not responsible for direct, indirect, incidental or consequential damages resulting from any defect, error or failure to perform. At participating locations only. Not the Beatles. Penalty for private use. See label for sequence. Substantial penalty for early withdrawal. Do not write below this line. Falling rock. Lost ticket pays maximum rate. Your canceled check is your receipt. Add toner. Place stamp here. Avoid contact with skin. Sanitized for your protection. Be sure each item is properly endorsed. Sign here without admitting guilt. Slightly higher west of the Mississippi. Employees and their families are not eligible. Beware of dog. Contestants have been briefed on some questions before the show. Limited time offer, call now to ensure prompt delivery. You must be present to win. No passes accepted for this engagement. No purchase necessary. Processed at location stamped in code at top of carton. Shading within a garment may occur. Use only in a well-ventilated are. Keep away from fire or flames. Replace with same type. Approved for veterans. Booths for two or more. Check here if tax deductible. Some equipment shown is optional. Price does not include taxes. No Canadian coins. Not recommended for children. Prerecorded for this time zone. Reproduction strictly prohibited. No solicitors. No alcohol, dogs or horses. No anchovies unless otherwise specified. Restaurant package, not for resale. List at least two alternate dates. First pull up, then pull down. Call toll free before digging. Driver does not carry cash. Some of the trademarks mentioned in this product appear for identification purposes only. Record additional transactions on back of previous stub. Unix is a registered trademark of AT&T. Do not fold, spindle or mutilate. No transfers issued until the bus comes to a complete stop. Package sold by weight, not volume. Your mileage may vary. This article does not reflect the thoughts or opinions of either myself, my company, my friends, or my cat. Dont quote me on that. Dont quote me on anything. All rights reserved. You may distribute this article freely but you may not make a profit from it. Terms are subject to change without notice. Illustrations are slightly enlarged to show detail. Any resemblance to actual persons, living or dead, is unintentional and purely coincidental. Do not remove this disclaimer under penalty of law. Hand wash only, tumble dry on low heat. Do not bend, fold, mutilate, or spindle. No substitutions allowed. For a limited time only. This article is void where prohibited, taxed, or otherwise restricted. Caveat emptor. Article is provided "as is" without any warranties. Reader assumes full responsibility. An equal opportunity article. No shoes, no shirt, no articles. quantities are limited while supplies last. If any defects are discovered, do not attempt to read them yourself, but return to an authorized service center. Read at your own risk. Parental advisory - explicit lyrics. Text may contain explicit materials some readers may find objectionable, parental guidance is advised. Keep away from sunlight. Keep away from pets and small children. Limit one-per-family please. No money down. No purchase necessary. You need not be present to win. Some assembly required. Batteries not included. Instructions are included. Action figures sold separately. No preservatives added. Slippery when wet. Safety goggles may be required during use. Sealed for your protection, do not read if safety seal is broken. Call before you dig. Not liable for damages arising from use or misuse. For external use only. If rash, irritation, redness, or swelling develops, discontinue reading. Read only with proper ventilation. Avoid extreme temperatures and store in a cool dry place. Keep away from open flames. Avoid contact with eyes and skin and avoid inhaling fumes. Do not puncture, incinerate, or store above 120 degrees Fahrenheit. Do not place near a flammable or magnetic source. Smoking this article could be hazardous to your health. The best safeguard, second only to abstinence, is the use of a condom. No salt, MSG, artificial color or flavoring added. If ingested, do not induce vomiting, and if symptoms persist, consult a physician. Warning: Pregnant women, the elderly, and children should avoid prolonged exposure to Happy Fun Ball. Caution: Happy Fun Ball may suddenly accelerate to dangerous speeds. Happy Fun Ball contains a liquid core, which if exposed due to rupture should not be touched, inhaled, or looked at. Do not use Happy Fun Ball on concrete. Discontinue use of Happy Fun Ball if any of the following 14
  15. 15. Disclaimers - The Subscription Trap 15
  16. 16. Disclaimers - The Average Consumer 16
  17. 17. Disclaimers - Richard v. Time 17
  18. 18. Disclaimers - Hearn v. Time ? 18
  19. 19. Disclaimers in Action 19
  20. 20. Disclaimers - Think Like a Comedian? 20
  21. 21. OQLF’s New Policy on Charter of the French Language - Exterior Store Signage in Quebec 21
  22. 22. Franchise Agreement -Sample Trade-mark, Advertising & Marketing Provisions (Appendix I) 22
  23. 23. Trade-mark Clauses• Registration of Mark by Franchisor• Licensing and use of Mark by Franchisee• Signage in Store (s.50(2)), Trade-marks Act 23
  24. 24. Advertising & Marketing Clauses• Local Advertising by Franchisee• Establishment of Fund by Franchisor for regional and national advertising• Segregated Account for Fund• Expenditures Allowed• Expenditures to benefit Franchisees generally 24
  25. 25. Protect & Enhance System ClauseThe following clause is an initial attempt to deal with the Dunkin’Donuts case as it relates to a Franchisor’s obligations to “protectand enhance” the System. 1.4 Acknowledgements by Franchisee re Marks and System The Franchisee acknowledges that substantial performance by the Franchisor of its obligations under this Article 1 regarding the Marks and under Article 2 regarding advertising, along with performance of related obligations of the Franchisee in this Agreement, will be sufficient to protect and enhance the goodwill associated with the Marks and the System.Suggestions for revised or alternate wording would beappreciated. 25
  26. 26. Thank YouJohn Chimienti, Canadian Tire Corporationjohn.chimienti@cantire.com416.480.3680Bill Hearn, Davis LLPbhearn@davis.ca416.369.5298John Rogers, Davis LLPjrogers@davis.ca416.941.5399 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. 26

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