Special Senate Committee on Charitable Sector Releases Final Report
Jun 2019 Charity & NFP Law Update
On June 20, 2019, the Special Senate Committee on the Charitable Sector released its final report, Catalyst for Change: A Roadmap to a Stronger Charitable Sector (“Report”), setting out its findings from a year-long study with respect to the charitable and non-profit sector and making 42 recommendations to the Government of Canada. The Report is intended to provide a “roadmap to ensure that genuine change is delivered so that the sector can reach from great to exceptional” as well as a “roadmap to a stronger and brighter future for the sector.”
For the balance of this Bulletin, please see Charity & NFP Law Bulletin No. 451.
Theresa L.M. Man to Chair CBA 2019-2020 Charities and Not-for-Profit Law Section
Jun 2019 Charity & NFP Law Update
Carters is very pleased to announce that Theresa L.M. Man will be assuming the role of Chair of the Canadian Bar Association’s Charities and Not-for-Profit Law Section starting in September 2019. The CBA Charities and Not-for-Profit Law Section addresses and advocates on behalf of its members on legal issues related to charity and not-for-profit law, and regularly liaises with governments and non-governmental organisations. Theresa currently is the Vice-Chair of the CBA Charities and Not-for-Profit Law Section.
Alberta Privacy Commissioner Finds Real Risk of Significant Harm from Accidental Email
Jun 2019 Charity & NFP Law Update
On February 14, 2019, the Information and Privacy Commissioner of Alberta (“IPC”) released her decision in YWCA Calgary, Re Decision No. (P2019-ND-013) requiring a not-for-profit incorporated by special act to notify an affected individual of a breach pursuant to Alberta’s Personal Information Protection Act (“PIPA”). The breach occurred on March 25, 2018, when a practicum student of the YWCA Calgary (“YWCA”) accidentally forwarded an email to a client instead of a co-worker with the same name. The information accidentally sent consisted of a name, email address and possible dates and times for intake. The student became aware of the error on the same day and several steps were taken in response: the student attempted to recall the email; the YWCA contacted its privacy counsel, asked the unintended recipient to delete the email, and sent an internal email instructing its workers on how to remove autocomplete contacts in emails. However, the YWCA did not receive confirmation from the recipient that the email had been deleted and not copied or distributed to others. The YWCA notified the affected individual by letter sent on March 28, 2018.
In the decision, the IPC wrote:
The Organization reported that “The likelihood that harm could result is very low. There was only one person who the information was sent to via the misdirected email. The information was not highly sensitive and no vulnerable individuals were involved.”
In my view, although the unauthorized disclosure was caused by human error and the email was accidently sent to a known unintended recipient, the likelihood of harm resulting from this incident is increased because the Organization did not receive confirmation from the unintended recipient that the email was deleted and not copied, forwarded or otherwise distributed.
The IPC decided that there was a real risk of significant harm to the affected individual and that the YWCA was required to notify the affected individual pursuant to section 19.1 of the Personal Information Protection Act Regulation. As the YWCA had already notified the affected individual before it received the IPC decision, the IPC stated that the YWCA would not be required to notify the affected individual again.
The IPC in this case took a liberal approach to the determination of what constitutes “real risk of significant harm” under Alberta PIPA. Although the Alberta PIPA does not apply to organizations that operate outside of that province, this case may be illustrative of how the “real risk of significant harm” analysis could potentially be applied under PIPEDA’s new mandatory breach reporting provisions, which uses the same test. This case also underscores the importance of all charities and not-for-profits having a privacy breach protocol in place, the need to carefully safeguard all personal information (whether sensitive or not), especially when sending emails, as well as the need to ensure that all staff and volunteers verify the names and email addresses of all recipients before pressing “send.”
Duty to Accommodate Ends When Employment Contract is Frustrated
Jun 2019 Charity & NFP Law Update
On April 4, 2019, the Ontario Superior Court of Justice (Divisional Court) (the “Court”) released its decision in Katz et al v Clarke, clarifying the extent to which an employer must fulfil its duty to accommodate and reaffirming that such duty ends when an employee with a disability is unable to work for the foreseeable future. An employee who is on disability leave is protected under provincial human rights legislation, in that an employer cannot terminate the employment relationship on the basis of the employee’s disability. Accordingly, if an employer fails to reasonably accommodate an employee with a disability or cannot demonstrate that such treatment or dismissal was unrelated to the employee’s disability, it may be held liable for claims with respect to discrimination and wrongful termination. In this case, the plaintiff employee made a claim of wrongful dismissal against his employer on grounds of discrimination with respect to his disability. The Court found in favor of the employer, holding that the employer had no duty to accommodate an employee who could not return to work. This Bulletin will review the Katz decision, which principles would be applicable to Ontario charities and not-for-profits.
For the balance of this Bulletin, please see Charity & NFP Law Bulletin No. 452.
Trademark Amendments In Force: What To Do Now
Jun 2019 Charity & NFP Law Update
As reported in the Legislation Update above, significant amendments to Canada’s trademark law came into force on June 17, 2019. Most recently, these changes have been outlined in the March 2019, April 2019, and May 2019 Charity & NFP Law Update.
One significant change that was introduced to Canadian trademark law is that trademark applicants are no longer required to have first used the trademark prior to obtaining a registration certificate. The unintended consequence of removing the “use” requirement from Canadian trademark law is the increase in trademark “trolls” and squatters that have pre-emptively filed numerous trademark applications preventing legitimate trademark owners from registering their trademarks. Many within the sector are concerned that these trademark “trolls” will try to extort value for the trademark registrations from the unregistered trademark owners.
Given this increased threat of trademark trolls and squatters, charities and not-for-profits must be vigilant of possible attempts by third parties to usurp their trademark rights. Charities and not-for-profits must therefore actively monitor the marketplace for unauthorized use of their trademarks by conducting periodic Internet searches, subscribing to “trademark watching” services, and encouraging employees and volunteers to be vigilant in watching for unauthorized trademark use. Trademark counsel should be utilized to enforce trademark rights through cease and desist letters and through the new and revised statutory mechanisms introduced to Canada’s Trademarks Act in order to provide trademark owners with enhanced tools to enforce trademark rights, as further described below:
Amendments to Opposition Proceedings – Charities and not-for-profits should be aware that the grounds for initiating an opposition proceeding against a pending trademark application have been expanded to allow parties to oppose a trademark application on the grounds of “bad faith”. Although not defined in the Act, the Canadian Intellectual Property Office has advised that the “bad faith” ground would include a situation where a third party can prove that a trademark has only been registered for the purpose of extorting value from the unregistered trademark owner. As a result, the addition of the bad faith ground may be a helpful tool against the misuse of the registration system and trademark squatting.
Amendments to Non-Use Proceedings – Trademark registrations are vulnerable to expungement from the Trademarks Database if they are not used within three years after the registration date. An expungement proceeding (i.e., non-use proceeding) can be initiated by any third party, at which time the trademark owner is required to furnish evidence of use of the trademark. Prior to the changes to trademark law coming into force, if an expungement proceeding was initiated, trademark owners were required to provide evidence of use of all of the goods and services covered in the registration certificate. These changes to expungement proceedings may be a strategic tool for charities and not-for-profits in overcoming confusion objections raised by the Trademarks Office, as a registrant may be less likely to defend an expungement request for only some of the goods and services, as opposed to a request to expunge a registration in its entirety.
Notification of Third Party Rights – Charities and not-for-profits may now provide a “Notification of Third Party Rights” to the Trademarks Office in an effort to enforce trademark rights. Prior to this mechanism coming into force, third parties would be required to wait until a trademark application was advertised for opposition before initiating any concerns regarding the trademark application. The Canadian Intellectual Property Office has indicated that “[n]otifications of third party rights are an informal way for third parties to bring to the attention of the Registrar information bearing on the registrability of a pending trademark application. This correspondence procedure is limited to three grounds, does not create an inter partes proceeding between the applicant and the third party, and does not replace opposition proceedings.” The three specified grounds that the Trademarks Office will accept third party correspondence in connection with an application are: (i) the trademark is confusing with a registered trademark pursuant to the Trademarks Act; (ii) the applicant is not the person entitled to registration of the trademark in view of the Trademarks Act (i.e., confusion with a pending application); and (iii) registered trademark(s) are being used in the application to describe the goods or services.
The recent legislative amendments provide charities and not-for-profits with additional mechanisms to enforce their trademark rights. Trademark owners should therefore become familiar with these additional mechanisms in order to best protect their assets. Importantly, charities and not-for-profits must also keep in mind that these same countermeasures may be used against them by third parties. As such, charities and not-for-profits should ensure that a proactive approach to trademark management is taken by conducting comprehensive trademark searches prior to launching new brand and registering trademarks with the Canadian Intellectual Property Office on a timely basis.