Is Your Business Protected?
Despite your best efforts as a business operator, accidents happen. There may be statutory requirements for your business to have insurance, but insurance has limitations and exclusions. Depending on the nature of your business, it may be appropriate to have clients sign a waiver or release of liability. This is generally accepted as a suitable defence to harms that arise from foreseeable risks, and may prevent the client from successfully recovering against you in negligence as well.
But what happens when your clients are minors? There are additional considerations involved when minors are asked to waive their right to recover in tort.
Waivers
A waiver is based in the doctrine of volenti non fit injuria, which means “to a willing person, injury is not done”. At its heart, a waiver is a contract that asks participants to voluntarily assume specific legal risks and waive, or give up, certain legal rights.
In order for a waiver to be enforceable, it is generally accepted that three questions must be answered in the affirmative, they are: did the plaintiff (participant) know what they were signing? Is the scope of the waiver broad enough to cover the conduct of the defendant (business operator)? And third, should the waiver be enforced?

1. Did the plaintiff know what they were signing? The plaintiff must have full knowledge of the fact that the waiver was meant to exempt the party (business operator) asking for the waiver from all liability as a result of the activity and any negligence (Dyck v Manitoba Snowmobile). The specific provisions must be brought to the attention of the participant signing the waiver[1] before they sign it.[2]
2. Is the scope of the waiver broad enough to cover the conduct of the defendant? The language of the waiver must encompass the specific activity that the plaintiff was engaged in.
3. Should the waiver be enforced? An unconscionable waiver will not be. Unconscionability is determined by review the bargaining power between the contracting parties. If there is disparate bargaining power, the waiver will be presumed unconscionable.[3] The presumption must be disproved by the stronger party.

A waiver, or release of liability, is a powerful tool that can serve to protect a party from liability. As such, proper drafting must occur in order to ensure that a waiver will be deemed enforceable by the courts.
Waivers given by or on behalf of a minor
It is understood in the common law that a contract that is detrimental to the interest of a minor is voidable by the minor. A waiver of liability, or any document preventing an individual from recovery in tort, is certainly detrimental to that interests, and therefore if it is signed by a minor, it would be unenforceable. A waiver signed by a minor is contrary to that minor’s interests and therefore not binding.[4] The perceived solution to this, would be to have the minor’s parent or legal guardian sign on their behalf. It is accepted that a guardian has the “plenitude of parental power”.[5] Which gives the parent or guardian the power to contract and bind their child. Further, It was implicit in the judgment of Toews v Weisner[6] that consent to a vaccination must be obtained from the legal guardian and specifically not the child (although in this particular case, the parent did not consent rendering the question moot). However, this interpretation has been challenged recently. In Wong v Lok’s Martial Arts Centre Inc[7] the court was asked to determine the validity of a waiver signed by a minor’s parent. The teenage plaintiff was injured during a sparring match at the defendant’s studio. The defendant was relying on the waiver as an absolute bar to recovery. The court held that the waiver was unenforceable, but ultimately relied on British Columbia’s Infants Act.[8]
The issue of whether or not a parent has the ability to waive a child’s right to sue in tort and recover has not been definitively adjudicated across Canada. However, it appears that the Courts are leaning towards not accepting these documents as binding.

[1] Crocker v. Sundance Northwest Resorts Ltd. (1988), 1988 CarswellOnt 962 (SCC)
[2] Thornton v. Shoe Lane Parking Ltd. (1970), [1971] 1 All E.R. 686
[3] Principal investments Ltd. v Thiele Estate (1987), 12 BCLR (2d) 258
[4] Swanson v Henkel Enterprise 1973 CarswellMan 53 (Man. CA)
[5] Anson v Anson; Young v Young
[6] Toews (Guardian ad litem of) v. Weisner 2001 BCSC 15
[7] Wong (Litigation Guardian of) v. Lok's Martial Arts Centre Inc. 2009 BCSC 1385
[8] Infants Act RSCB 1996 c 223

Kevin Major-Hansford is a 3L at the University of Calgary's Faculty of Law and will be completing his articles at Borden Ladner Gervais LLP. 

Employment Contracts Part II: What to Include 

This is the second part of a two-part introduction to employment contracts for start-up companies. Part I (Employment Contract: Put it in Writing) detailed the general function of employment contracts and emphasized the importance of early adoption of written employment contracts in order to establish the essential terms of the employment agreement between the employer and employee in order to reduce the possibility and impact of future dispute. This Part II explores in greater detail some practical considerations of what should be included in these written employment contracts for early-stage growth or start-up companies. 

Generally 
Employment agreements used by start-up companies should be kept relatively simple. This is because of the anticipated change in nature and character of the work required from early-hire employees as well as the need for the company to maintain a flexible structure that will allow it to grow most effectively and efficiently. As a start-up company grows, new experienced executives will be hired to advance the company’s goals, which may result in diminished or changed responsibilities of initial employees. For this reason, the description of job duties in employment contracts should be kept as general as possible. The contract should also state that because of the company’s anticipated growth, the responsibilities, job title, and position of the employee may change from time to time. Clearly stating this will help a company avoid a constructive dismissal action because the contract provides the company the power to make these changes from time to time. 
Furthermore, employment contracts should avoid specifying vacation policies or benefit plans as these are likely to change over time. The contract should also explicitly incorporate by reference the separate agreements that form part of the contract for employment, including the stock option agreement, share subscription agreement, non-disclosure and non-competition agreements and any assignment of technology (as applicable). 

Termination Provisions 
Unless terminated for cause, when an employee is terminated, the company must pay the employee a certain sum, called notice. In Canada, the length of the notice period and therefore the amount of severance owed to that employee is established by two legal regimes. First, the various provincial Employment Standards Code legislation provide for a minimum amount of notice, which is dependent on the duration of employment. Second, and usually more important, are notice amounts established by common law (i.e., judge made law), which are regularly much higher than the minimum notice periods established by legislation—the basis of which are the judge’s estimation of what is provided for under the employment contract. Since this basis is contractual, an explicit provision in the employment contract that sets out the proper notice period and severance amounts will remove this discretion from the courts and give the company greater certainty, thus reducing risk. 

Non-Competition Provisions 
Non-competition provisions serve to prevent employees from working for competitors and passing on intellectual property and know-how to competitors. These provisions are theoretically enforceable in Canada but are subject to restrictions that make them of limit use. This is because courts place a high value on ensuring individuals are not denied the opportunity to work for a living. That said, non-competition provisions can be useful if their scope is limited geographically, temporally, and with respect to job descriptions and specific competitors. By narrowing the scope of the non-compete, courts are more likely to find that the covenant allows the former employee ample alternative employment in their specialization without offending the covenant. 

Non-Solicitation Provisions 
Often, a more effective contractual method of preventing employees from using company intellectual property and know-how to compete with the company is through the use of non-solicitation provisions. These provisions have the effect of barring former employees from contacting and soliciting the company’s current employees, investors, customers, business partners, and suppliers in connection with a competing business. While non-solicitation provisions are more likely to be enforceable than non-competition provisions, they may also be struck down if a court finds them too broad—this usually happens when the provision has the effect of significantly restricting an employee’s ability to find employment in his or her specialized field. Again, limiting the scope of the covenant will increase the probability that it will be found acceptable. First, this can be done by limiting the duration to one year or less. Second, a company should consider who the restrictive covenant applies to. By limiting the application of the provision to only contacts that the employee had contact with during his or her employment at the company, the courts are more likely to find that this is an appropriate application of non-solicitation to protect the companies interests and not used instead to prevent the employee from obtaining future employment. Finally, the non-solicitation provision should be clearly differentiated from the non-competition agreement because in the event that the latter is struck down, the former may fall with it if it is not distinct and separable. Additionally, a severability clause should be included in the contract so that in the event one clause is found void, the remainder of the contract will survive and remain in force. 

Intellectual Property Ownership 
There is a general expectation that employees will create valuable products and ideas at all times when employed by a start-up. Of particular relevance in the context of employment contracts are patents, copyright, and trade secrets. 
First, any invention, whether or not potentially subject to patent protection, is presumed by law to be the property of the inventor employee; however, this presumption can be rebutted if the company can show that: (1) a contract exists between the parties that stipulates otherwise; (2) the employee is a senior officer or fiduciary of the company and the invention directly relates to the business engaged in by the company; or (3) the employee was engaged specifically for the purpose of inventing or innovating. Companies be proactive and take measures to avoid these future disputes. This is best done by contractually characterizing invention ownership and including contractual obligations for employees’ assignment of rights and administrative duties related to patents and patent applications. 

Second, unlike inventions subject to patent protection, products that are subject to copyright protection are presumed to be the property of the company employer, not the employee, provided the product was created during the course of employment. There is, however, risk that an employee will claim that work was performed outside of employment on personal time or that the product was developed, or partially developed, prior to the commencement of employment. To avoid this sort of dispute, a company should consider obtaining broad rights to all inventions and works developed by employees and related to the employer’s business. A company may also wish to include a requirement for the employee to disclose any innovations created to allow for timely determination of ownership and to chart the course for desired intellectual property protection. 

Finally, though trade secrets are not technically recognized as a form of intellectual property in Canada, this information is often the most important type of information for stat-ups that requires protection. This is the information that an employee obtains only as a direct result of employment with the company, which can include both business and technical data. The common law will generally allow a company to prevent an employee from disclosing or using a trade secret if it can show that the information is a trade secret and the employee owes a duty of confidence to the employer. This duty of confidence arises automatically if the employee is a fiduciary (director or officer), but may also be found to exist if a lower level employee had information that would make the company vulnerable to disclosure. Rather than relying on the courts to make such determination, a company should include in its employment agreement or non-disclosure agreement (signed contemporaneously with the employment agreement) a duty of confidence on its employees. These restrictions should be limited in scope to only information that is special or peculiar to the company’s business because overly broad restrictions on disclosure may be struck down by a court and held unenforceable as restraint on trade. 

Closing Remarks 
For more information on particulars related to employment contracts and protecting your company’s interests and property, please contact the BLG Business Venture Clinic. One of the Clinic’s student will gladly detail the above and further considerations for drafting employment contracts and the ancillary agreements that form the contract for employment.

Ryan Logan is a 2018 JD Candidate at the University of Calgary and the University of Houston. 

Registering trademarks in Canada
What is a trademark?
A trademark is a form of intellectual property. A trademark may be one or more words, sounds, or designs. It includes both logos and slogans. It is used to distinguish the goods and services of one person or organization from those of another. It is distinct from other forms of intellectual property, such as a patent, copyright, or industrial design.

There are three types of trademarks: 
Ordinary mark

• Words, sounds, designs, or a combination of words, sounds, or designs
• Used to distinguish those goods or services from others

Certification Mark

• Purpose is to indicate that a certain good or service meets a specific standard
• May be licensed to multiple people or organizations

Distinguishing guise

• Shape of goods, shape of their containers, or ways of packaging or wrapping
• Used to show that a specific individual or organization has made the product 

What is a trade name?
A trade name and a trademark are different concepts. A trade name is the name of the business and it can only be registered if it is also used as a trademark. This means that the name of the business must be used to identify goods or services.  You should note that trade names are commonly used as trademarks even when they have not been registered as trademarks.
                  Difference between a registered and an unregistered trademark
The owner of a registered trademark acquires the sole right to use the trademark across Canada for a term of 15 years, and for additional 15-year terms, if the registration is renewed. This means that a registered trademark could be valid indefinitely, so long as the required renewal process is followed. A registered trademark is entered by the Registrar into the Register of Trademarks. The act of registration is direct evidence that the owner owns the trademark. This means that if a dispute arises, the burden to prove ownership falls on the individual challenging ownership. The registered owner does not have to prove they own the trademark.
                  Ownership over a trademark can also arise automatically at common law. This means that registration is not essential to protecting ownership over a trademark. At common law, the use of a trademark as a distinguishing mark for goods or services for a specific amount of time can provide a basis for ownership. However, if a dispute arises, both parties would be responsible for proving ownership (unless one of the parties was the registered owner). This may lead to a protracted and expensive legal battle. As a result, legal protection is strengthened with registration.
                  Enforcing a trademark
                  It is the responsibility of the trademark owner to enforce a trademark. Registration does not impact this responsibility. In order for a court to find that a trademark has been infringed, the trademark owner must demonstrate that confusion may be caused for the average consumer.    
                  What cannot be registered as a trademark
The following cannot be registered as a trademark:
Names/surnames

• An exception may apply if it can be proved that the goods or services are known to the public under that name or surname
• An exception may apply if the name or surname has another meaning

Clearly descriptive marks

• Describes a feature of the goods or services
• Examples: “sweet” for ice cream, “juicy” for apples, or “perfectly clean” for dry-cleaning services  

Deceptively misdescriptive marks

• Clearly misleading
• Example: “air express” for a ground transportation courier service

Words representing a geographical location commonly known to be the place of origin of goods/services

• Example: “Italy” for pasta
• In addition, you cannot register a word that would mislead the public into thinking the good or service comes from a particular location if that is not actually the case

Words in other languages

• Examples: “gelato” (ice cream in Italian), “anorak” (parka in Inuktitut), or “wurst” (sausage in German)

Words/designs that could be confused with a registered or pending trademark

• Examiners of a trademark application will consider whether:
  • The trademarks look or sound alike and whether they suggest similar ideas or meanings
  • The trademarks are used to market similar goods or services

Words/designs that look very similar to a prohibited mark

• Examples of prohibited marks:
  • Trademarks that are similar to official marks, such as official government designs (unless permission is obtained)
  • Obscene, scandalous, or immoral subject matter
  • Portraits or signatures of living individuals or individuals who have died within the last 30 years

Duration and cost of registration
The duration of a registered trademark is 15 years from the date of registration. A registered trademark can be renewed every 15 years for an additional term of 15 years. There is no limit on the number of permitted renewals.
At a minimum, the cost of registering a trademark will include a filing fee of $250 and a registration fee of $200. There may be additional fees associated with registering a trademark depending on the circumstances, in addition to any fees associated with using a professional trademark agent, if applicable.   
                  Steps to take before preparing a trademark application
You may wish to search the database of existing trademarks in Canada. This will help you determine if a similar trademark already exists. You may also wish to search trade names, but there is no central database of trade names in Canada. To do so, you may wish to engage a professional trademark agent. The trademark database does not include trade names (unless it is also a registered trademark).   
                  Process for filing a trademark application
You will need to prepare a trademark application package, which includes the application for registration form, a formal drawing (if necessary), and the filing fee. A separate application is required for each trademark.
                  A formal drawing is required if the trademark encompasses anything other than a word or a combination of words. The formal drawing must be black and white and include a description of any colour or colours that are featured in the trademark. You should note that, in order to retain your registered trademark, you cannot change the colour or colours you have described as being featured in the trademark in your application. Finally, if the design is detailed, the drawing should be as large as possible, but within the limits of 22cm x 35cm or 8.5 inches x 14 inches.   
                  Your application can be filed online or by mail. Once received, the application will be given a filing date, if it is complete. The filing date matters because it is the date used to assess entitlement to registration in the event that there are co-pending trademarks. The Registrar will then complete an examination, which entails: a search of the trademark records for any conflicts with pending or existing trademarks; an examination of the application to determine that it obeys the relevant laws and regulations; publishing of the application in the Trade-marks Journal to determine if there are any challenges to the application; and, if there are either no challenges or a challenge has been decided in the applicant’s favour, registration of the trademark. The processing time for an application ranges from several months to a few years.
                  Additional information
For more information, please visit the following websites:

• http://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/h_wr00002.html, or
• http://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/h_wr02360.html#whatAreTM.

Natalie Holtby is a 3rd year student at the University of Calgary's Faculty of Law.  

Consumer Protection Changes in Alberta
 
Late in 2017, the Alberta government passed the Consumer Protection Act, which amended the former Fair Trading Act. These pieces of legislation provide the framework for consumer protection law in Canada, and contain restrictions and rights relevant to many small businesses and consumers that they may not be aware of.
 
The Bill, passed in December 2017,  contains an updated preamble reading “all consumers have the right to be safe from unfair business practices, the right to be properly informed about products and transactions, and the right to reasonable access to redress when they have been harmed”, which is meant to reflect the additional protections to consumers throughout the document.
 
The Act establishes the right of a consumer to post negative reviews online. According to the new Act, “[a] business shall not include in a consumer transaction a provision that prohibits a consumer from publishing a review of the business or transaction.” The Section (183.1), also ensures that no action can be taken in respect of the publishing of a negative review unless it is “malicious, vexatious or harassing or otherwise made in bad faith.”
 
The bill is also relevant to those who’ve noticed mandatory arbitration clauses in the terms of any agreement they’ve entered into, such as with an internet service provider. According to the new Act, suppliers cannot enforce mandatory arbitration except in some circumstances. Those circumstances include where the consumer and supplier have agreed to arbitration after the dispute arose, or where the consumer can elect to use arbitration. So if you threaten court action on your next argument with your cell phone provider, your threat just got more credible.
 
Pet owners should also pay attention to the changes. Vets are required to disclose “all fees for the prescribed type of veterinary medicine services proposed” before the services are performed.
 
Another change to the Act, is the promise to establish a Consumer Bill of Rights, which will be the first of its kind in Canada. The new Part 8.1 of the Act creates a new series of rules targeting ticket resale bots. Under section 57.2, and secondary seller, or operator of a platform that sells tickets second hand will have to provide refunds where a ticket turns out to be counterfeit or does not work in granting admission to the event. Anyone operating a digital platform, such as Stubhub or Gametime, would therefore be subject to these rules if scammers attempt to use their platforms. This Part also outlaws any use of automated ticket purchasing software.
 
There is also a new set of rules for car dealers and repairs. This applies to consumers that are individuals or small businesses with a car fleet of five vehicles or less. Section 108.2 of the Act requires the business to provide provide a warranty in accordance with the regulations, provide an estimate of the cost of proposed work in accordance with the regulations, and prohibits vehicle repairs that are not authorized as required in the regulations. This Section is not yet inforce, but will have significant impacts on the sale and repair of vehicles once the regulations are introduced.
 
 Alex Grigg is a 3rd year JD/MBA candidate at the University of Calgary.