Legal Issues When Doing Business Between Canada and the US

In this interview we ask New York lawyer Nick Pavlidis about several cross border legal issues, including advice for Canadian businesses selling to the US and US employers looking to hire Canadians who will work from Canada.

Legal Issues When Doing Business Between Canada and the US Transcript

Q: What legal issues do Canadian businesses need to consider when selling to the US?

A: For the most part, a lot of the legal issues when you are dealing with online, really stem with communications into the United States. In addition, if you are shipping products into the United States, you need to be concerned about whether there are some regulations in the united states that relate to your product or your services especially if it is something that is perishable 0- foods, labeling issues. There are some generic laws that apply but in general, really specific to you company. You would want to reach out to someone in the United States to talk about how your company fits into the scheme of the international business.

Q: What content issues need to be considered?

A: When you are talking about trademarks and copyrights, it is really important ot know where your message is being sent. If you are doing a lot of business in the United States, you want to be protecting your rights in the united states so that your brand, your name and your products are protected there as well as in Canada or outside. If people are speaking about your company, you also want to know where they are. If they are in the United States, there are laws like the Communications Decency Act and there are laws like the Digital Millennium Copyright act that protects companies from speech. You also need to know that the United States has very strong laws when it comes to protecting speech – stronger than many other places. So some things that may seem offensive to folks in the united states and outside are protected so it encourages a free flow of information. But when people cross over the line into saying false things of fact about your company that cause actual damage then you may have issues that you are able to prosecute a little more aggressively in the United States.

Q: There is a new piece of legislation, can you tell us about that? The Speech Act?

A: The Speech Act was just enacted into law in August by president Obama. What that does is that it forbids companies from outside the United States from enforcing judgments that were obtained for defamation outside the United States unless there are safeguard for US citizens and US companies that talk about the freedom of speech and due process clause of the United States which generally means if you have a lawsuit that has succeeded outside the United States, you can’t enforce it inside the united states unless you could have gotten the same judgment.

Q: So if a Canadian company was say to launch a lawsuit in the courts in Canada and win a judgment against a US company based on defamation or liable that means that they may not necessarily get that judgment enforced if the company has no assets in Canada, is that correct?

A: Generally speaking, if the judgment comports with the US defamation laws, it is going to be a stronger case to enforce it in the United States. If they can’t or if it doesn’t – if it is based on some protections that the United States does not offer the same as Canada, then it might not. You’re right.

Q: How is copyright handled in the United States? I understand that the United States is pretty aggressive, as is Canada in protecting copyright ownership, is that correct?

A: Yes, generally speaking, whenever a company or a person writes something down or publishes something for the first time, copyright protection is automatic. In order for you to have a stronger case and enforce it in the courts, you would want to register your copyrights, but for the most part, copyright is with the speaker. If someone speaks online, someone puts a comment about a company or you post something online about your company, that is protected in the United States for copyright from a general perspective.

Q: So for a Canadian company, not only should you not be taking content from other people online, but if you have an issue with a blogger that is picked up one of your posts or violated your copyright is there reasonable grounds to expected it to be enforced just as easily in the States as it can here?

A: Generally speaking again you want to make sure your copyright protection is registered in the United States and things like that and generally speaking, yes, the United States takes copyright protection very seriously.

Q: What is trending in law when it comes to intellectual property and the Internet?

A: Well, the biggest trend it seems is with “E-personation” or online impersonation where states in the United States are making it criminal to create a fake profile or a fake website to gain an advantage over a competitor or someone else. It doesn’t even have to be a politician, if you make a profile for someone broke up with you and you create a profile for that person that appears to be legitimate but it paints them in a bad light then in some places you can go to jail.

Q: This is going off the topic of online reputation management but there is a real crossover happening now where companies in the United Sates are contacting us saying “I want to hire an employee that is going to work out of Canada” and they are going to work for a company and they are an employee but they may only come to Canada once a year or for a day or a week and a little bit in the reverse as well. How is this affecting legal issues of employment when you have this cross-boarder relationship?

A: Well employment law is actually a really interesting area because where the employee is working has a lot to do with some laws that may or may not apply to the relationship with the company. So if the person is going to be traveling into the United States as a regular part of their business, then you need to speak with someone about the particulars of that situation. There are aggressive restrictions that the United States put in that may apply depending on the level of contact.

Q: Whereas in a company from Canada, if someone is an independent contractor and sets up their own corporation my understanding is that it may be a better way to go. Can you comment on that?

A: In the United States, the independent contractor role is a very tricky one because there are a number of indicia of employment that the United States will review to determine whether it is an actual relationship of employment or an actual independent relationship. Things like if the person can come and go as she pleases. If the person uses her own tools. If the person uses her own office space. If the person has control over other aspects of how she conducts the business with your company. Those are indicia that may indicate an independent contract or relationship. But if the person is working for your company, gets benefits from your company, is told her schedule, and must use your computers or your tools, those things start to look like an employment relationship. So it is very important to know that the technical aspects of whether it is a separate business that is set up really take a back seat to the in-practice aspects of it.

Q: Any trends that you seem coming – maybe legislation that has been talked about or anything new that we should watch for?

A: I think for the most part, there is a lot of talk over the “E-personation” and with the number of social media sites that are coming up, people are grabbing identities - sometimes they try to do it for profit. We see for a long time with newspaper ads and personal ads, people would take jokes on their friends – the law is taking it very seriously so that is I think the biggest one with the online world especially.

Q: So people can actually get their names back? If someone was to register my name as a dot ca or dot com and get charged under this law?

A: Well it depends on the situation, but yes, if they are charged under impersonation laws and misusing the website, generally speaking you can.