The Executive’s Summary

MULTI-MATERIAL STEWARDSHIP MANITOBA PROGRAM
Sep 07, 2009

1. What is Multi-Material Stewardship Manitoba Packaging and Printed Paper Program Plan?

Multi-Material Stewardship Manitoba (“MMSM”) is a steward responsibility organization formed in 2006 in anticipation of the Packaging and Printed Paper Stewardship Regulation. This regulation was created under The Waste Production and Prevention Act (“WRAP”) and establishes requirements for stewards who use paper, plastic, metal, glass or a combination of these materials for packaging or printed paper that is sold for use in the Province of Manitoba. The MMSM is an Industry Funding Organization (IFO) that enables companies to meet their obligations as a steward. The Packaging and Printed Paper (“PPP”) program will provide 80% of funding for a waste reduction and prevention program for packaging and printed paper normally managed through municipal waste management systems. (MMSM June 22, 2009 Report – P. 1)

• Packaging refers to any package or container, or any part of a package or container that is comprised of glass, metal, paper or plastic, or any combination of these materials, including service packaging.
• Printed Paper refers to paper that is not packaging, but is printed with text or graphics for the purpose of communicating information.

2. Who qualifies as a “steward”?

A steward is the “person” who assumes the responsibility and declares that the designated packaging and printed paper material they supply for consumption in Manitoba complies with the legal requirements of the WRAP Act. 

The Regulation defines steward of designated material as:

• the first person who, in the course of business in Manitoba, supplies a designated material to another person; or 
• a person who, in the course of business in Manitoba, uses a designated material obtained in a supply transaction outside of Manitoba.

Decision Tree 

 A steward may also be referred to as the ‘first importer’ or the ‘first seller’ of a designated material that has its final consumption in Manitoba. A steward may be from any part of the product distribution chain including brand owners, producers, manufacturers, distributors, retailers or businesses that import packaging or printed paper for their own use. (MMSM June 22, 2009 P. 5) 

If a person supplies packaging or printed paper to a distributor who in turn imports it into Manitoba, the original supplier is not a steward as they are not the ‘first importer’ into the province. For example, if an Ontario based food company sells products with designated materials to a Manitoba retailer or a Manitoba distributor, it is the Manitoba-based company who is obligated to comply with the PPP program.

However, MMSM will allow a company who is higher in the distribution chain (i.e. brand owners and national distributors), regardless of their physical location, to assume the responsibility for the designated packaging and printed materials in Manitoba on behalf of an otherwise obligated steward. The purpose of the process is to provide an opportunity for another company to accept reporting responsibilities and make payments on behalf of a company that would otherwise be the steward. (MMSM June 22, 2009 P. 6)

This process will allow for:

• a Manitoba retailer to report on behalf of a Manitoba based manufacturer
• an out of province manufacturer/distributor to report on behalf of the “first importer” in Manitoba
• a head office or parent company to report on behalf of all its company divisions

3. How does one register as a steward?
 
Stewards will be able to register on an online data management system that will be created and maintained by MMSM. The data management system will allow stewards to register online, process invoices, review reports, enter data and set up primary and billing contacts with the MMSM. It also provides a tool to assist MMSM staff to manage the overall program. The system will be similar to those used in other provinces with comparable stewardship programs in place, such as Ontario and Quebec. An online data management system should be ready no later than January 1, 2010. Stewards will be notified as to when this system will be in place through general Manitoba media ads, the Winnipeg Chamber of Commerce and other similar methods.  Stewards who are currently reporting in Ontario will be notified through the Stewardship Ontario “Need to Know” bulletin.

4.  What are the responsibilities of a steward?

All stewards of packaging and printed paper are obligated to provide a program to recover the material that they import into the province. A company can choose to discharge this obligation in one of two ways. Firstly, a steward can discharge their obligation using a cooperative approach through the MMSM, an Industry Funding Organization (IFO). If a company were to choose this method, they would be required to measure and report annually to MMSM the total quantity (in kilograms and/or units) of designated packaging and printed paper which they import for use in the province. The reported kilograms of packaging and printed paper would then be multiplied by the material-specific fees to determine a steward’s total fees payable to MMSM for one year (See Table 1.1). (MMSM June 22, 2009 P. 10)

In addition, stewards reporting to MMSM are required to:

• identify the brands, products, customers or suppliers for which the steward is responsible
• provide a detailed explanation of the steps taken to calculate the total quantity of packaging and printed paper
• provide details on the deducted quantities of designated material that are not managed through Manitoba’s municipal waste management system (by material type, number of units and weight) and explain the method by which this deduction was derived (e.g., customer sales records, market research, waste audits, etc.)
• maintain records for a period of at least five years and make these records available to MMSM upon request for audit purposes

Secondly, if a steward feels it would be more cost effective, they can submit a plan to the minister detailing how they will, on their own, collect their packaging and printed paper materials and keep them out of municipal waste management systems. If a steward is able to keep 100% of the material they import into Manitoba out of the municipal waste management systems, they are not obligated to pay any fees. However, if a portion of their material enters municipal waste management systems, they must pay the fees for that portion to the MMSM.

If a steward decides to submit a plan for designated material recovery to the minister for approval they must ensure that the plan complies with the guidelines that the minister has established respecting consultation about stewardship programs before the application stage. The requirements of a stewardship plan can be found in the WRAP Guidelines for PPP Program Plan. These guidelines indicate that a steward’s plan must include the implementation of: a waste reduction and prevention program, a province wide collection system, educational programs, point of sale informational programs, payment of government salaries and other administration costs and a system for the collection of revenue from subscribers as well as a system for the payment of expenditures for the program. (WRAP Guidelines 2008 P. 1)

5. How does a steward reporting to MMSM calculate their payments?

Stewards who choose to discharge their obligation through the MMSM must measure and report annually to MMSM the total quantity (in kilograms and/or units) of designated packaging and printed paper that they supply for use in the province. The reported kilograms of packaging and printed paper will then be multiplied by the material-specific fees to determine a steward’s total fees payable to MMSM for year one (see Table 1.1). An invoice will then be made available to the steward on the online data management system.

Because many stewards do not typically track the types and weights of components of PPP that they use, MMSM will allow but not require the use of several calculator tools available for specific sectors and a defined list of products. In the absence of actual packaging data for their designated material, some stewards may use these calculators to develop an estimate of the weight of materials for which they are obligated. Depending on the sector, the calculators will be made available online. This calculator tool is available for stewards in both Ontario and Quebec, and MMSM will request usage rights for the calculators from Stewardship Ontario to implement in Manitoba. However, some sectors have preferred to retain the proprietary rights to calculators that they have developed for their own sectors.

Table 1.1: Material Specific Fees

6. When, and to whom, are payments made?
 
MMSM is projecting April 1, 2010 as the date on which stewards are obligated for the levy on their materials. Annual packaging information will be collected from stewards beginning January 1, 2010. A steward’s invoice for the first five months will based on their sales for 2009 and will be issued on May 1, 2010, covering the period of April 1 – August 31, 2010. The second invoice will be issued on September 1, 2010 and will cover the period of September 1 – December 31, 2010.

In 2011 the invoicing will normalize into quarters. The first quarter invoice will be issued on January 1st for estimated 1st quarter fees (estimate based on one quarter of the 2011 annual obligation). Subsequent invoices will be issued on April 1st, July 1st and October 1st, which will reflect the actual 2011 obligation based on 2010 data submissions (a Steward’s prior calendar year’s data).

Though invoices are an estimation based on the previous year’s volume of sales, any overpayment or underpayment resulting from changes in sales volume will be accounted for in the following year’s fees.  Payments will be able to be made online using the data management system and will be made payable to MMSM.

7. Interest and Penalties

MMSM will charge interest and penalties to stewards that have not submitted fees or stewards that have not registered. Delinquent and later joining stewards will be retroactively billed back to the date of obligation (assumed to be April 1, 2010). Table 1.2 presents MMSM’s schedule of interest and penalties. Any fees paid after the year in which they were due will be used to reduce the total steward fees payable in the following year.

Table 1.2: Interest and Penalties

CHANGES TO COMPETITION ACT
Sep 05, 2009

Recent changes to the Competition Act which take effect in March, 2010 will result in significant changes for small and medium sized enterprises, as well as large companies.

Under the new law it will be illegal to agree with a competitor on price, market allocation or output, regardless of whether the agreement will have an effect on the market. Under the current law, these types of agreements are only illegal if they create an undue lessening of competition. Currently, such agreements between smaller competitors have such a small effect on the market that they are unnoticed and therefore unregulated. However, this will change under the new regulations.
 
There are two ways companies can avoid prosecution for taking part in such agreements with competitors. First, the Competition Bureau has the ultimate discretion to consider whether such agreements should be prosecuted. The Bureau will not prosecute the offending companies if they feel that doing so is not in the best interest of the public.

Second, a company can avoid prosecution even if they are part of an illegal agreement with competitors. If a company has a lawful agreement in place, such as a joint venture, and as part of this agreement they are involved in an illegal agreement with a competitor, they will not be prosecuted for the violation of the Competition Act. This rule holds true as long as the narrow, illegal agreement is reasonably necessary and directly related to the broader, lawful agreement.

There are other changes to the Competition Act that came into effect on March 12, 2009 but also represent important consequences small companies. Several pricing provisions that were once considered criminal have been repealed, with the same conduct now being handled in civil actions and potentially attracting private litigation.

First, the price maintenance provision has been repealed, allowing suppliers to have more influence on pricing down the line.  Second, the price discrimination provision, which was put in place to protect small and medium sized enterprises from paying more for products than larger companies, was revoked. Predatory pricing was also repealed which may allow larger companies to lower their prices to below cost in order to remove competitors, subsequently then raising prices afterward. The promotional allowance provision was repealed as a criminal action, which will have a negative impact on small and medium sized enterprises, as the original provision helped level the playing field between large and small companies. The provision was added because the Bureau felt that the price discrimination provisions were not adequate to deal with issues relating to sales promotion and advertising. The provision was created to ensure that promotional allowances are made available to all customers on a proportionate basis so that no buyer receives an unfair advantage.

Finally, the government has dramatically increased the fines associated with misleading advertising, with first violations going from a fine of $100,000 to $10 million, which would obviously have a more dramatic impact on a small company.

So, what should companies do? The first step is awareness; many companies are unaware that they are soon to be subject to conspiracy laws. Furthermore, even if the Competition Bureau decides that prosecuting an offending company is against the public interest, the company is still vulnerable to civil litigation from other companies who can allege violation of the law.

To prepare for the implementation of the changes to the Competition Act, companies should perform an internal audit to determine if they have any agreements with competitors that may be an issue. If such agreements are in place, they should determine whether or not they are ancillary to a broader lawful agreement, if not, companies should begin to make the changes necessary to comply with the Competition Act, sooner rather than later.  

UNSOLICITED TRADE-MARK INVOICES
Feb 13, 2009

TRADE-MARK AUDITS
Feb 13, 2009

Trade-marks are rarely static and regular reviews of a company’s trade-mark assets should be performed.

A trade-mark audit should identify:

• the trade-marks the company currently uses;
• whether proper trade-mark use and notice is being made;
• the trade-mark applications and registrations that exist;
• the geographical areas in which protection is needed; and
• if additional registrations are required.

A review of product lines, brochures, web sites and other marketing materials will often reveal trade-marks that have been adopted and used, but have not been protected. In addition, future marketing plans can also be considered. Once all current and future trade-marks have been identified, consideration can be given to proper registrations being obtained.

Registrations should be broad enough to cover not only the goods and services currently provided under an existing trade-mark, but consideration should also be given to adding the goods and services which may be adopted in the near future.

A trade-mark audit can also identify ownership issues such as:

• a mark may have been assigned to another entity;
• a name change or amalgamation may have occurred;
• address changes that need to be recorded; and
• past financing liens that need to be removed.

Last but not least, a trade-mark audit should also review all of a company’s domain name registrations, as extensive domain name registrations provide a cost effective method of ensuring that unscrupulous competitors are not attempting to diminish a company’s trade-mark rights.

SECTION 9(1)(n)(iii) OFFICIAL MARKS
Jan 04, 2008

The requirements for the registration of official marks under section 9(1)(n)(iii) by public authorities continues to evolve.

Earlier case law restricted the definition of what constitutes a “public authority”. We could simply file a notice in prescribed form, claiming adoption by a public authority, and provide evidence that the applicant met the new test of what constitutes a public authority under the Trade-marks Act.

Now, as a result of a Federal Court decision, the Registrar of Trade-marks will also require evidence of adoption and use of an official mark. While the Trade-marks Actdoes not define "adoption" or "use" in regards to official marks, it was held that a common feature of both "adoption" and "use" is that there is an element of public display, and the evidence adduced in support of a claim of adoption and use must demonstrate an element of public display.

In FileNET Corporation v. Canada (Registrar of Trade-marks) (2002), 22 C.P.R. (4th) 328 (F.C.A.), use consisting of advertising the mark on a government website in connection with an Internet service was considered sufficient use even though the actual service was not yet available.

In other cases, the evidence in the following examples was found to be insufficient evidence of adoption and use of official marks:

• The display of a sign cannot constitute adoption or use of a specific word as an official mark if the specific word was not distinguished in any manner from the surrounding text. In this case the usage of the specific word "millennium" in the sign was merely as a generic or descriptive expression and not as a "mark" within the meaning of section 9 of the Act.
• Internal use of a mark in correspondence, e-mails and memoranda is not considered evidence of adoption and use of the mark.
• Evidence of adoption and use of an official mark by a licensee will not be considered adoption and use by the public authority.

The result of this change in practice in the Canadian Intellectual Property Office is that upon filing an application for registration of an official mark under section 9(1)(n)(iii), not only must we file evidence that the applicant is a public authority, but we must also file evidence of adoption and use of an official mark.