Internet continues to spawn interesting legal dilemmas

Susan Vogt practises marketing law at the Toronto offices of Gowling, Strathy & Henderson. The year 2000 is an interesting time to be practising law. More than ever before, clients are asking questions to which there are no answers. On...

Susan Vogt practises marketing law at the Toronto offices of Gowling, Strathy & Henderson.

The year 2000 is an interesting time to be practising law. More than ever before, clients are asking questions to which there are no answers. On the so-called information highway, there are vehicles that defy description as well as traffic signs – laws and regulations – that are being twisted, subverted and just plain ignored.

I won’t presume to cover all the emerging legal issues in one column. These are just a few of the things that have caught my attention lately.

Cybersquatters in jeopardy: The practice of registering famous brand names as domain names for sale to the highest bidder – or rightful owner – is much less attractive now that the U.S. Anti-Cybersquatting Act has become law. Cybersquatters who register third-party trademarks as domain names face penalties of up to US$100,000 per name if the trademarks are protected under U.S. law. This will definitely deter would-be pirates in the United States. However, Canadian trademark owners may still need Network Solutions and other registrars to resolve disputes over pirated domain names.

The ‘.ca’ Register: Every Canadian company that has filed for a .ca domain name knows that changes to the process are desperately needed. These changes have been promised for months and are still pending. In the very near future, we are told, it will be possible to register more than one .ca name, to register as an individual rather than a corporation and to avoid the cumbersome sub-domains (for example, ‘halifax.ns.ca’). The .ca register has been underutilized. There are only 70,000 .ca registrations (compared to over seven million dot-coms). Hopefully this will change.

Cross-border Information Shopping: The recent proliferation of company and product Web sites raises some interesting dilemmas. Many products – like foods, drugs and cosmetics – are heavily regulated in most countries. National laws define what products can be sold, what claims can be made and whether an intermediary – like a doctor or pharmacist – is required. But what happens when Canadians have easy and immediate Internet access to products and information that are prohibited in Canada?

Two situations are becoming commonplace. There are at least hundreds of online pharmacies through which Canadians can order prescription drugs without a prescription as well as drugs that are not approved for sale in Canada. Health Canada and many pharmaceutical companies are less than pleased with this situation but barring inspection of every shipment at the border, the ‘illegal’ drugs keep coming in. In fact, Health Canada has a policy that permits importation ‘for personal use only’ of a three-month supply of many non-approved drugs. Needless to say, the policy does not apply to narcotics.

The information dilemma is more nuanced. Take milk and osteoporosis for example. In the United States, you are permitted to claim that adequate calcium consumption helps prevent bone loss and the risk of osteoporosis. In Canada, this claim is strictly off-limits.

But say a U.S. Web site discusses the link between milk consumption and osteoporosis risk reduction along with other information that is perfectly legal in Canada. Could Canadian milk producers advertise the U.S. Web site address? This would, in effect, direct Canadians to a mixture of ‘legal’ and ‘illegal’ information and allow Canadian milk producers to indirectly advertise a non-approved claim.

On the other hand, the Web site is there for Canadian consumers to discover. The best view is that a simple mention of the URL does not contravene Canadian law. Time will tell. But regulators cannot ignore that the cat is out of the bag in terms of Internet content.

Sexy Technology: The next new medium will be interactive television with data transmitted over the Internet through set-top boxes.

Patent-pending technology will enable advertisers to deliver viewer-targeted advertising and information within ITV environments. Commercials can be targeted to ITV subscribers based on a combination of fine-tuned demographics, profiles, viewing activities and subscriber-registered interests. The customization can be as simple as a message scrolling across the screen or as complex as a complete video substitution. This means that the commercials shown on my TV during Law & Order reruns could be completely different from those shown at the same time on the same channel to my next-door neighbour.

This is the future and it is very strange. The new millennium indeed.

Susan Vogt can be reached by phone at (416) 862-5439 or by e-mail at vogte@gowlings.com

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