Canada: Official Mark Developments

Originally published in Blakes Bulletin on Intellectual Property, December 2007

This past year saw several important developments in the area of official marks. First, the Federal Court of Appeal in Canada Post v. United States Postal Service affirmed a lower court decision that precluded foreign public authorities from enjoying the benefit of Canada’s official mark legislation. Second, a judge of the Federal Court in See You In – Canadian Athletes Fund Corporation v. Canadian Olympic Committee held that a public authority must satisfy the Registrar of Trade-marks that it has indeed adopted and used a mark as an official mark for wares or services in Canada before the Registrar can publish notice of such adoption and use, and the Trade-marks Office subsequently amended its procedures relating to official marks.

Canada has, since the early 1930s, provided special protection to "official marks" used by public authorities, universities and certain armed forces. Paragraph 9(1)(n)(iii) of the Trademarks Act (the Act), which applies to public authorities, provides that "No person shall adopt in connection with a business, as a trade-mark or otherwise, any mark consisting of, or so nearly resembling as to be likely to be mistaken for, any badge, crest, emblem or mark adopted and used by any public authority, in Canada as an official mark for wares or services", in respect of which the Registrar of Trade-marks has, at the request of the public authority given public notice in the Trademarks Journal of the adoption and use of such official mark.

Section 11 of the Act prohibits anyone from using in connection with a business, as a trade-mark or otherwise, any mark that is adopted contrary to section 9. Section 12 also prevents the registration of a mark the adoption of which is prohibited by section 9. Accordingly, official marks can provide rights that, in certain respects, exceed those accorded to registered trademarks. For example, the existence of a section 9 notice for a mark can prevent a third party from registering a similar mark even though the use by the third party of its mark predates the section 9 notice.

The Registrar has, in the past, taken the position that it has no discretion to refuse to give public notice of an official mark on any grounds other than that the requesting party is not a "public authority". For example, the Registrar will not refuse to publish an official mark even though it is identical to a previously registered mark, is non-distinctive or is clearly descriptive of particular wares and/or services. As a result, the Registrar has given public notice of such official marks as CHIROPRACTOR, ENGINEER and MASSAGE THERAPIST.

There are no express provisions in the Act for contesting rights in an official mark, either before or after the Registrar has published a section 9 notice. Given the growing use of official marks and the significant protection given to such marks, it is understandable why so many challenges have been brought in the Federal Court in recent years seeking to set aside section 9 notices and the rights granted by such notices.

In January 2007, the Federal Court of Appeal affirmed a lower court decision holding that only Canadian public authorities could take advantage of s. 9(1)(n)(iii) (Canada Post v. United States Postal Service). Canada Post had sought judicial review of the Registrar’s decision to publish notice of the adoption and use of thirteen official marks by United States Postal Service (USPS). Among other grounds, Canada Post argued that the words "in Canada" in s. 9(1)(n)(iii) modified "public authority" such that only a "public authority in Canada" could take the benefit of this section. USPS argued that the words "in Canada" modified "adopted and used" such that a public authority, whether it was Canadian or non-Canadian, need only establish that it had adopted and used its mark as an official mark in Canada. USPS further argued that Canada Post’s interpretation was inconsistent with Canada’s obligations of national treatment under both the Paris Convention and TRIPS.

In its decision affirming the lower court’s decision, the Federal Court of Appeal held, in effect, that official marks carry such powerful rights that they should only be granted to entities that are controlled by the Canadian government. The Court of Appeal also held, without giving any reasons, that its interpretation of s. 9(1)(n)(iii) was consistent with Canada’s treaty obligations. The Supreme Court of Canada refused to grant leave to USPS to appeal this decision. As a result, in the absence of legislative reform, only Canadian public authorities will be able to take advantage of official mark protection.

For many years, upon receipt of a request to publish a section 9 notice, the Registrar only required the applicant to establish that it qualified as a "public authority" but did not require it to also establish that it had adopted and used its mark in Canada for wares or services.

In a decision issued in April 2007 (See You In – Canadian Athletes Fund Corporation v. Canadian Olympic Committee), however, a judge of the Federal Court cast doubt on this practice. More particularly, Justice Phelan held that it was illogical for the Registrar to require an entity to submit proof that it was a "public authority" but not require it to also submit proof that it met the other statutory criterion, namely that it had adopted and used the mark in question as an official mark for wares or services.

As a result of this decision, the Trade-marks Office issued a practice notice in August 2007 regarding its procedures for handling requests for official mark protection. This practice notice clarified that the Registrar will now require evidence of adoption and use of a mark as an official mark and that the "adoption" and "use" must show an element of public display.

Although the practice notice does not address the issue of whether the "adoption" and "use" must be in Canada, the logical conclusion of the Canada Post v. United States Postal Service decision is that a "public authority in Canada" need only show that it has "adopted and used" its mark as an official mark somewhere, but not necessarily in Canada.

The August 2007 practice notice also contains a curious statement, namely that evidence of adoption and use of an official mark by a licensee will not be considered adoption and use by the public authority. As support for this statement, the practice notice cites the decision of Justice Tremblay-Lamer in Canada Post v. Post Office and the decision of Justice O’Reilly in Canadian Rehabilitation Council for the Disabled v. Rehabilitation Foundation for the Disabled (CRCD). This is difficult to understand for two reasons. First, although Justice Tremblay- Lamer did indeed hold that use by a licensee was not sufficient under s. 9(1)(n)(iii), two other judges of the Federal Court reached the exact opposite decision in cases that they decided. More particularly, in Ontario Association of Architects v. Association of Architectural Technologists of Ontario, Justice McKeown held that the evidence filed by the respondent established that it had adopted and used its official marks itself and through its members as licensees. This fact was sufficient, in McKeown J.’s view, to satisfy subparagraph 9(1)(n)(iii). This finding was not addressed by the Federal Court of Appeal on the appeal of McKeown J.’s decision.

More than one year later, in Magnotta Winery Corporation et al. v. Vintners Quality Alliance, Justice MacKay dismissed Magnotta’s argument that VQA could not rely upon use of its official mark by its licensees. MacKay J. held that "nothing pre- cludes the use of an official mark by a party licensed or otherwise permitted to use it by the public authority whose adoption and use of the mark has been accepted and published by the Registrar, and that authorized use constitutes use by the public authority." MacKay J. did not refer to either the decision in Ontario Association of Architects or the decision in Canada Post on the same point. Therefore, it is difficult to see how the Trade-marks Office could conclude that Tremblay-Lamer J.’s ruling in Canada Post v. Post Office constitutes the definitive view of the Federal Court on whether a public authority can rely upon use by its licensees.

Second, the practice notice’s citation of Justice O’Reilly’s decision in the CRCD case seems ill-founded. In CRCD, the plaintiff argued that its licensee should not be able to rely upon its licensed use of the applicant’s mark as adoption and use of such mark as an official mark by the respondent licensee. Justice O’Reilly reviewed the decisions of Tremblay-Lamer J. and Mackay J. in Canada Post and Magnotta respectively and acknowledged the contradiction between them but also noted that he was not being called upon to decide the same issue. Instead, O’Reilly J. held that it would be unfair for one public authority, having licensed its official mark to a second public authority, to risk limiting the scope of its intellectual property should the second public authority decide to seek its own official mark notice. In such circumstances, O’Reilly J. held, the licensee should not be permitted to rely upon its licensed use as "adoption and use" under s. 9(1)(n)(iii).

In view of the above, the Trade-marks Office’s practice notice on this point mischaracterizes the law. It will, however, take another decision of the Federal Court of Appeal to resolve this issue.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.