As artificial intelligence (AI) becomes integral to various industries, Canadian organizations must navigate a complex regulatory landscape to ensure compliance and maintain operational integrity. This article examines key requirements from three main bodies: the Canadian Securities Administrators (CSA), the Trademarks Opposition Board (TMOB), and Canadian courts.
1. CSA Requirements for Capital Markets
The CSA's December 2024 Notice emphasizes technology-neutral regulation, focusing on the activity rather than the AI tools themselves. Non-Investment Fund issuers (Non-IF Issuers) must:
- Deliver Tailored Information: Provide specific details on AI use, including benefits, risks, and business impacts, avoiding generic statements.
- Address Risks: Include ethical, operational, cybersecurity, and regulatory risks in continuous disclosure documents.
- Avoid Misleading Disclosures: Ensure promotional claims are fair, balanced, and supported by evidence, maintaining consistent high-quality disclosure.
2. TMOB Requirements for Trademark Proceedings
The TMOB's June 2025 practice notice mandates a declaration on AI-generated content in trademark submissions, requiring verification of authenticity to avoid penalties like cost awards.
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In addition to these requirements, businesses must also safeguard their intellectual property. The Trademarks Opposition Board (TMOB) has made it clear that verifying the authenticity of AI-generated content is crucial to avoiding legal repercussions. This is where IP Defender comes into play. As a trademark monitoring service, IP Defender helps businesses monitor and protect their trademarks from conflicts and infringements across national databases.
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3. Court Guidance for Submissions
Courts have issued directives emphasizing human oversight and authenticity:
- Alberta Court of King's Bench (ABKB): Requires verification of sources and AI-generated content.
- Federal Court: Mandates declarations about AI use in submissions.
- Ontario Superior Court: Enforces certifications of cited authorities to ensure authenticity.
Case Law Examples
- In Zhang v Chen, a lawyer faced costs for AI hallucinations.
- Rule 4.06 in Ontario requires lawyers to certify the authenticity of cited authorities, reinforcing their duty to verify sources.
Conclusion and Moving Forward
Organizations must adopt a multi-faceted approach:
- Assess AI Impact: Determine materiality based on financial impact, efficiency, or competitive positioning.
- Implement Governance: Establish oversight mechanisms, including audits and employee training.
- Stay Informed: Monitor regulatory updates from CSA, TMOB, and courts to maintain compliance.
Considerations
- Exceptions and Grandfather Clauses: Clarification is needed for existing AI systems.
- Industry Differences: Larger corporations may have more resources compared to smaller businesses.
- Legal Accountability: Lawyers must verify AI-generated content's authenticity, adding a layer of responsibility.
In summary, Canadian organizations must balance AI's benefits with legal compliance. Proactive measures such as assessments, governance frameworks, and ongoing education are essential to navigate this evolving regulatory environment effectively.
By integrating IP Defender into your strategy, you can enhance your trademark protection and stay ahead of potential threats, ensuring your business remains compliant and resilient in the face of changing regulations.