Keeping the law on your side

Defending a lawsuit or prosecution based on advertising or promotions is probably among the more distasteful ways to spend your time, not to mention your money.What you want to do, then, is strike just the right balance so that you get...

Defending a lawsuit or prosecution based on advertising or promotions is probably among the more distasteful ways to spend your time, not to mention your money.

What you want to do, then, is strike just the right balance so that you get legal advice when you really need it and avoid the legal meter when you do not.

The following are some pointers on how to minimize the unpleasantness of dealing with the legal system and, where possible, lawyers.

1. Know when to call a lawyer for help. When you are creating a promotion, you may need a lawyer experienced in the area to check a number of elements. Some of these would include:

a) reviewing the promotion agency/client agreement – to make sure both parties are clear about how and what the agency will be paid and what the agency is and is not expected to do, among other things;

b) checking the rules and regulations and promotional copy relating to a contest. Here, you want to make sure the material:

- discloses all information required by law;

- is clear and not confusing;

- does not mislead by inflating the value of prizes, misrepresenting the odds of winning, or giving a misleading impression of what the prizes include;

- contains all the boilerplate you hate but is there for a reason;

- does not contravene the Criminal Code provisions relating to contests (e.g., the provisions that bear on forced purchases and skill-testing questions); and

- does not violate any other law or third party’s rights.

c) reviewing your declaration and release forms to make sure they are broad enough to cover your risks;

d) advising on the consents and/or other agreements you should be getting from third parties.

Your agreement with prize or premium suppliers, for example, should include appropriate warranties, indemnities and representations that they have and will provide the number of items you need at the price you need, among other terms;

e) ensuring you have done any necessary Quebec filings.

2. When you are creating advertising more generally, there may be a great number of legal issues to consider, depending on the product or service and the content of the ad, but these are some common ones to think about:

Are you using someone’s name, voice or likeness?

You should determine whether you need permission. And watch out for a common misconception: getting a photo from a stock house does not necessarily mean you have the right to show the person’s likeness in your ad.

What the stock house normally gives you is the right to use the copyright in the photograph. Getting permission from the person shown is up to you.

Are you doing ads for food or other specifically regulated products?

If you are doing food ads, you need to make sure the claims comply with the highly detailed Food and Drugs Regulations.

You should also bear in mind the various food-related guidelines published by Consumer and Corporate Affairs Canada and the Canadian Advertising Foundation.

There are a number of laws and guidelines that affect the advertising of other products as well – e.g., alcohol, beverage containers, textiles, precious metals, drugs and cosmetics, to mention a few.

Are you making price claims?

If you are talking about a special, bargain, limited time only, free or bonus offer (among other similar terms), there are a number of misleading advertising principles you need to take into account.

This is particularly so if your special price has a comparative slant. Price claims are among the most actively prosecuted under the misleading advertising provisions of the Competition Act.

Are you using someone’s trademark, copyright or other intellectual property?

This is an exceedingly tricky area.

First of all, you may be surprised about the types of words, phrases and copy that can be protected under trademark or copyright laws (e.g., a chart, compilation or a two-sentence excerpt from a story may be protected.)

You may also be surprised by how fast and vociferously someone will let you know you have infringed their rights.

You will have some explaining to do, both to your client and your boss, if you end up having to pull ads or billboards, withdraw commercials, and/or recall and relabel products under threat of an injunction.

Are you making performance claims?

It is a common belief that you can make a performance claim if you feel sure in your heart that it is true, and that you would not have any trouble proving the claim if challenged.

In fact, quite apart from whether a claim is true, it is a separate offence under the Competition Act to start making a performance claim to the public before you have conducted ‘adequate and proper’ tests to support it.

Do not forget that misleading advertising can carry high penalties. Individuals are also frequently charged in addition to the companies for whom they work.

3. Minimize the time your lawyer will need to spend on your copy.

As lawyers generally bill on an hourly basis, the more you can do to minimize the time your lawyer must spend on your copy, the lower your legal bills will be. Some measures you can take in this regard are:

a) Do an internal review. When you have prepared your ad copy, have someone objective within your company take a look at it before you send it off to the lawyer.

Often, spotting inconsistencies or confusing copy is a matter of looking at it with a fresh eye – and chances are your colleague’s fresh eye will be less expensive than your lawyer’s.

b) Do your own precedent check.

If you are doing rules and regulations for a contest, refer to your own precedents (start a binder and throw a copy of your legally approved rules and regulations into it every time you finish a contest), or look at a number of rules and regulations that are out on the market.

There are many provisions in rules that are standard, and it will save time to include them before a lawyer has to do a major writing job on your copy.

c) Highlight changes on resubmitted copy.

If you have received comments back from your lawyer and are resubmitting it to him/her for a sign-off, highlight where you made the changes. That can save a great deal of time and money, particularly where you are going through a number of redrafts.

4. Learn how to not shoot yourself in the foot.

If you do get sued or investigated, your life will become an uncomfortably open book to your pursuers.

You may be required to show them all memos, notes, letters or other information relevant to the issues in dispute – whether you stamped them ‘Confidential’ – and they may be used against you in court.

Remember that if a problem does arise and you need to gather information internally to see what happened, talk to your lawyer right away.

He/she will tell you how to gather the information under the veil of solicitor-client privilege so the documents cannot be reviewed by the other side.

5. Use a lawyer who is familiar with the laws that apply to your industry. There is a mortifying body of statutes, guidelines and cases that relates to marketing and advertising.

Lawyers who focus in this area will not necessarily know the answers to all your questions off the top of their heads.

On the other hand, it is hardly fair to expect lawyers who aren’t experienced in the area to be able to identify all the legal issues, to swiftly know where to look for the answers, to have the government contacts to call, to know how your industry works (asking a lawyer to define fsi, p-o-p, p-o-s and usp would be a quick acid test) and to give you the advice with the swiftness you need (invariably yesterday.)

Carefully planning your work and tapping competent outside resources when necessary should help keep your risks and your headaches within acceptable bounds.

Wendy Reed is a lawyer with the firm of Heenan Blaikie in Toronto and practises exclusively in the area of marketing and advertising law.