Charter of the French Language

Businesses active in Quebec must be mindful of the impact of the province's recent change of policy concerning the regulation of French language requirements in labeling and advertising. The revised guidelines of the Office Québécoise de la langue française (the "Office") signal a change to a stricter interpretation of the regulation under the Charter of the French Language (the "Charter").

The Charter provides that every marking on a product or on a document or object supplied with it, along with catalogues, brochures and similar publications, must be drafted in the French language. While the inscription may be accompanied by a translation, no inscription in another language may be given greater prominence than the French version. Public signs, posters and commercial advertising may be both in French and in another language provided that French is markedly predominant.

The Regulation respecting the language of commerce in business (the "Regulation") creates exceptions to the above with respect to the language of trade-marks. A "recognized trade-mark" may be exclusively in a language other than French unless the French version has been registered. Until recently, the Office had adopted the accepted legal view that "recognized trade-marks" under the Trade-marks Act included both registered and unregistered trade-marks.

According to the most recent Office's guidelines however, a "recognized trade-mark" pursuant to the Regulation is a registered trade-mark. The Office is now taking the view that the trade-mark exception provided by the Regulation is not applicable unless the mark is registered under the Trade-marks Act. Previously, the accepted interpretation of the Regulation was that the exception applied to unregistered trade-marks and trade-marks that were the subject of pending applications before the Canadian Intellectual Property Office.

It is important to note that neither the legislation nor its regulations have been amended. In the past, the courts have interpreted the Regulation as allowing the use of unregistered trade-marks where the courts were satisfied on the evidence that the marks constituted "recognized trade-marks" within the meaning of the Trade-marks Act. In practice, the Office is now taking the view that it is not in a position to assess whether a trade-mark is exempt from French language requirements unless it is registered.

The adoption of the revised guidelines suggests that the Office will become more proactive in its enforcement of the Charter requirements. Businesses should be aware that trade-marks that are composed of elements that are descriptive of the wares or services are most likely to be challenged. The Office has also indicated its intent to enforce French requirements more diligently in public signs.

Given the Office's change of policy, businesses who wish to avail themselves of the trade-mark exception are well advised to seek registration of trade-marks particularly where the mark contains descriptive terms. When selecting a trade-mark, the choice of coined terms which do not consist of dictionary words in any language are less likely to be problematic. The Office also invites trade-mark owners to adopt French versions of their trade-marks for use in the Province of Quebec. However, it must be kept in mind that the recognized trade-mark exception only applies where no registered French version of the trade-mark exists.

The objective of the legislation remains to motivate businesses to use French in their commercial dealings in the Province of Quebec. Beyond legal considerations, businesses may wish to consider the commercial benefits of marketing products in Quebec's official language. Please contact your Gowlings professional should you wish to discuss the impact of the Charter and the Office's new guidelines on your business.

An Update on the Introduction of Gift Card Legislation in Canada

Not all gift cards are created equal so holders of gift cards must be aware of the protections, if any, associated with them. Particularly if your gift card is from a retailer in financial trouble, you want to make sure that you get your card's worth. If the retailer goes bankrupt and closes its stores, your card has no protection and becomes worthless. Best to give, and receive, cards from financially-stable companies and, in these times of economic uncertainty, to use them quickly.

Recent changes to consumer protection legislation provide you with more protection than previously, when gift cards first became popular.

Currently, the provinces of Ontario, British Columbia, Alberta, Manitoba and New Brunswick have enacted laws governing gift cards. In early 2007, Nova Scotia passed a first reading of a bill to amend the Nova Scotia Consumer Protection Act, to regulate gift card programs but no regulations have yet been brought into force. Saskatchewan has also taken steps to introduce legislation regulating the supply of prepaid purchase cards through amendments to the Consumer Protection Act but these amendments are not yet in force. It is also expected that the Consumer Protection Act in Quebec will be amended to regulate gift cards.

Because of these changes to the law with respect to gift and prepaid purchase cards, it is important for the providers of gift card programs to understand both their obligations and the rights of a purchaser or recipient of a gift card. Franchisors will then be able to implement consistent policies for their franchisees across the country.

Application

In each province, relevant provincial laws apply to gift cards bought on or after specific dates. In Ontario, the law applies to cards bought on or after October 1, 2007. In British Columbia, the law applies to cards sold on or after November 1, 2008. In Manitoba, the law applies to cards purchased on or after November 1, 2007. In Alberta, the law applies to cards purchased on or after November 1, 2008. In New Brunswick, the law applies to gift cards sold on or after June 18, 2008.

Expiry Dates

In each of Ontario, British Columbia, Manitoba, Alberta, and New Brunswick, expiry dates on gift cards are prohibited so a gift card with an expiry date remains valid as if it had no expiry date.

Fees

Fees are generally prohibited, with specific exemptions. In Ontario, for example, fee prohibitions do not apply to gift cards that can be used at multiple unaffiliated sellers, such as in a shopping mall except as otherwise provided by regulation. As of September 1, 2008, the supplier is permitted to levy a fee of $1.50 upon issuing such a gift card, referred to as an "open loop gift card" in the legislation. The supplier can also charge a dormancy fee in certain circumstances not exceeding $2.50 per month.

In some instances, fees are expressly permitted. In British Columbia, a supplier may charge a fee for replacing a lost or stolen gift card or to customize a gift card. In Manitoba, a supplier may charge a fee if the gift card holder provides nothing of value to the supplier at the time the card is issued. In Alberta, a supplier may charge a one-time activation fee for a gift card at the time the card is purchased, for the replacement of a lost or stolen card and for the customization of a card.

Special Requirements

In each of the provinces, the laws require a seller to disclose relevant information pertaining to the gift card. This information varies slightly between the provinces, but generally includes the fees that a supplier may charge, relevant restrictions, limitations and conditions on the use of the card, how the card holder may obtain information about the card, including the balance remaining on the card, and the return policy that will apply to purchases made with the card.

Exemptions

Each of the provincial laws provide exemptions to compliance. In Ontario, the law does not apply to a gift card issued for a charitable purchase, for one specific good or service, or for a gift card agreement with respect to either a charitable purpose or for one specific good or service. In British Columbia, the law does not apply to a card issued or sold for a specific good or service, a charitable purpose, a marketing, advertising or a promotional purpose, or to a person who provides anything less than full monetary value for the card. In Manitoba, the law does not apply to a card issued for only one specific good or service or in cases where the card holder provides nothing of value in exchange for the card. In Alberta, the only exception is with respect to those cards that expired prior to November 1, 2008.

Who, What, Where and When

• Len Polsky and Ned Levitt have been named to the 2009 editions of each of The International Who's Who of Franchise Lawyers and Canadian Who's Who.
• Ned Levitt, Debi Sutin, Jeff Hoffman, Len Polsky and Peter Snell have again been named as Leading Lawyers in the speciality of Franchise Law in the 2009 Canadian Legal LEXPERT® Directory
• Debi Sutin's article "Can you Negotiate your Franchise Agreement" appeared in the March/April issue of Franchise Canada Magazine
• Ned Levitt, Debi Sutin, Jeff Hoffman, Len Polsky and Chad Finkelstein will attend the Annual Convention of the Canadian Franchise Association May 3-5, 2009. Len Polsky will speak at the Convention on "Alternatives to Termination in Tough Economic Times"
• Ned Levitt, Len Polsky, Debi Sutin, Jeff Hoffman and Peter Snell will attend the International Franchise Association Annual Legal Symposium in Washington D.C. May 17-19, 2009. Ned Levitt will moderate the opening plenary session "Franchising in Challenging Times: Challenges and Opportunities" and Peter Snell will speak at the session entitled "Refranchising: Strategies for Managing the Sale of Company-owned Units"
• Ned Levitt, Len Polsky and Peter Snell will attend the Annual Joint International Franchise Association/International Bar Association Franchising Conference May 19-20, 2009 in Washington, D.C..