Dealers in jewellery and other articles made from precious metals commonly use standardized indications of quality, called "quality marks" in some countries and "hallmarks" in others, to readily indicate to consumers and regulators that the article is a precious metal article having the claimed attributes. By way of the Precious Metals Marking Act ("PMMA"), such quality marks are regulated in Canada to provide for the uniform description and quality marking of precious metal articles and to help ensure that articles are not marked in any manner that is misleading or deceptive.
While the PMMA is not a new piece of legislation, the Act and its regulations are actively enforced by the Competition Bureau. Recently, on April 13, 2016, the Competition Bureau issued a report on the results of a so-called "blitz" at major department and chain stores in Vancouver, Toronto and Montreal, whereby inspectors of the Competition Bureau tested almost 1000 pieces of jewellery to determine whether they comply with the requirements set forth in the PMMA and its Regulations. While only sixteen of the almost 1000 pieces of jewellery tested during the "blitz" were identified as problematic, the issuance of the report suggests that the Competition Bureau continues to monitor the marketplace to promote and ensure compliance with the PMMA.
The PMMA and "quality marks"
The PMMA deals broadly with the permitted marking of "precious metal articles", which are generally defined as articles of merchandise wholly or partly, or purporting to be wholly or partly, composed of a precious metal. "Precious metal", in turn, means gold, palladium, platinum, silver and any alloy of those metals and any other metal prescribed by Regulations. While the PMMA does not mandate that precious metal articles must be marked for quality, the statute does prohibit any manufacturer, importer, wholesaler, retailer or other person who deals in precious metal articles from applying to an article a mark indicating that it is a precious metal article (or importing into Canada any article of merchandise so marked), except as authorized by the PMMA.
The PMMA and its Regulations provide detailed guidelines on permitted quality marks and the standards that articles must meet before they may be marked with quality marks (including permissible tolerances and ranges).
Where a quality mark is applied to a precious metal article, a registered or applied for trademark must also be applied to the precious metal article
In regulating the marking of precious metal articles, the PMMA intersects in an interesting manner with the Trademarks Act, a statute with a fundamentally similar purpose.
From the perspective of trademark law, the key provision of the PMMA is section 4(3), which specifies that where a "quality mark" is applied to a precious metal article, the article must also have applied to it a registered trademark or a mark in respect of which an application for registration that is acceptable to the Minister has been filed in accordance with the Trademarks Act. Subsection 5(2) of the Precious Metals Marking Regulations provides that where a quality mark is stamped, engraved or imprinted on a precious metal article, the trademark must be applied to the article by the same method as the quality mark.
The PMMA provides exceptions to the "trademark marking" requirement of section 4(3) where a precious metal article is hallmarked in accordance with the laws of the United Kingdom or has applied to it by a foreign government a mark that indicates the quality of the precious metal under the laws of that country. Interestingly, the language of section 4(3) relating to an applied-for trademark (i.e., a mark "in respect of which an application for registration that is acceptable to the Minister has been filed") is not found in the Trademarks Act and is not used by the Canadian Intellectual Property Office. This language of the PMMA has not been judicially considered. The Competition Bureau's 'Guide to the Precious Metals Marking Act and Regulations' states simply that the article must bear "a trade-mark that has either been applied for or registered with the Registrar of Trade-marks in Canada". Presumably, such an application should at a minimum comply with the formalities requirements of the Trademarks Act and be designated as "Formalized" by the Formalities Section of the Canadian Intellectual Property Office, in order to comply with section 4(3) of the PMMA.
Violations and penalties
The statute specifies that any person who fails to comply with or contravenes a provision of the PMMA, including by applying to a precious metal article a mark not authorized by the PMMA, omitting or neglecting to apply to a precious metal article any mark required by the PMMA, or selling or importing into Canada a precious metal article that is marked otherwise than in accordance with the PMMA, is guilty of an offence and may be fined. Perhaps more concerning for importers, wholesalers, retailers and other dealers of jewellery or other precious metal articles, the statute provides that every article that is found to violate the PMMA will be broken down and every part of any such article forfeited to the Crown.
Concluding comments
Given the potentially significant penalties that may be imposed under the PMMA upon importers, wholesalers, retailers or other dealers of jewellery or other precious metal articles that violate or do not comply with the PMMA, it is important that those who deal in such articles carefully tailor their business practices to comply with the PMMA, including by ensuring that a registered or properly applied-for trademark has been applied to any precious metal article marked with a quality mark.
For further information regarding this topic, please contact a member of our firm's Trademarks group.
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