Canada: Non For Profit Entities And Trade-Names

Last Updated: December 3 2013
Article by John McKeown

A recent decision of the Federal Court clarifies that non-profit entities have rights arising from the use of their trade names.

The Application

Carbon Trust filed a trade mark application for the mark set out below

for use in association with certification of companies, persons, processes, products and systems with the purpose of monitoring and improving quality and measuring standards as to energy consumption, energy efficiency, carbon dioxide emissions, greenhouse gas emissions or other environmental standards.

The Opposition

Pacific Carbon Trust is a Crown Corporation in British Columbia that was set up as part of the province's Climate Action Plan. It opposed the application on a number of grounds, including the ground that the applicant was not entitled to register the mark because at the date of filing, the mark was confusing with the opponent's trade-names Pacific Carbon Trust and Pacific Carbon Trust Inc. which had been previously used by the opponent in Canada.

The Board concluded that the Carbon Trust mark was confusing with the Pacific Carbon Trust's trade-name, which the Board found had been used in Canada prior to the filing date for the application for the Carbon Trust mark, and had not been abandoned.

The Board identified the test for confusion as being one "of first impression and imperfect recollection". The Board noted that the use of a trade mark may cause confusion with another trade mark or trade name if "the use of both in the same area would be likely to lead to the inference that the wares or services associated with them are manufactured, sold, leased, hired or performed by the same person, whether or not the wares or services are of the same general class":

In analyzing the question of confusion, the Board considered the five factors set out in the subsection 6(5) of the Act.

Regarding the inherent distinctiveness of the trade mark and trade name, the Board found that the Carbon Trust footprint design possessed "only a very limited degree of inherent distinctiveness" given that it could be interpreted as referring to either a carbon or an environmental footprint. Similarly, the Board found that the Pacific Carbon Trust trade name had little inherent distinctiveness since it evoked its geographical location ("Pacific") and its carbon offset activities.

With respect to the extent to which the trade mark and trade name had become known within Canada, the Board noted that there was no evidence that the Carbon Trust had used the Carbon Trust mark in Canada. In contrast, the Board was satisfied that the Pacific Carbon Trust had established some reputation for the trade name Pacific Carbon Trust but that any such reputation would be restricted to BC.

As concerned the length of time each trade-mark or trade-name had been in use (section 6(5)(b)), the Board noted that the Carbon Trust mark had never been used in Canada, whereas the Pacific Carbon Trust trade-name had been used in Canada since 2008.

With respect to the nature of the parties' services/business and trade the Board was satisfied that the parties' services could overlap, as they were highly related.

The Board rejected the Carbon Trust's argument that because its services are expensive, its consumers are sophisticated and would not be confused by the marks. The Board agreed with the Pacific Carbon Trust that the price of the wares was irrelevant when assessing confusion. Rather, the test for confusion is one of first impression, and subsequent steps that may be taken by consumers in an attempt to remedy any first instance confusion were therefore irrelevant.

The Board concluded that in light of the nature of the parties' services and the ideas suggested by their respective trade mark or trade name, consumers may infer an association between them, resulting in confusion.

The Appeal

The Carbon Trust appealed from this decision to the Federal Court on a number of grounds.

First, they argued that Pacific Carbon Trust could not own a trade-name within the meaning of section 2 of the Act because it does not carry on a "business" since its object was not to make a profit. In this regard they relied on section 2 of the Trade-marks Act which defines a "trade-name" as "the name under which any business is carried on, whether or not it is the name of a corporation, a partnership or an individual".

The judge did not accept this argument and referred to the fact that recent Board decisions have adopted a broader definition of "business" as one which "could encompass any purposeful activity which might well ... be charitable or educational in purpose".

The second argument was that the Board had misapplied the test for confusion.  The judge refused to accept this argument as well. The judge said that taking all of the surrounding circumstances into account, including the factors enumerated in subsection 6(5) of the Trade-marks Act, she came to the same conclusion as the Board. As a result of the overlap in the type of services offered by each of the parties and the ideas suggested by their respective trade mark or trade name, the judge concluded that consumers "may infer an association" between the two entities, which would cause confusion.

Although the Carbon Trust was correct to state that the cost of wares or services can be relevant, this does not change the fact that the test is still one of "first impression". The possibility of subsequent research by an attentive consumer of expensive wares or services was recently addressed by the Supreme Court of Canada. A consumer shopping for expensive goods or services is "likely to be somewhat more alert and aware of the trade-mark associated with the wares or services they are examining and its similarity or difference with that of the prior trade-mark" but the test remains one of "first impression and imperfect recollection" as explained by the Supreme Court .


This case clarifies that not-for-profit entities do have rights arising from the use of their trade names. It also provides a reminder that the test for confusion under the Act is one of "first impression and imperfect recollection".

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.

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John McKeown
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