Canada: Official Marks Can Be Challenged By Judicial Review

Last Updated: August 25 2016
Article by Philip Lapin and Daniel Hnatchuk

"Official marks" are a form of intellectual property protection unique to Canada. Many trademark owners, even in Canada, are unaware of official marks.  Those who are aware, are often unclear about the nature of the rights and the options available for dealing with citations of official marks.

Official marks can be a source of frustration when cited by the Trademarks Office against a trademark application. However, applicants have several options available to them to overcome a citation of an official mark.

Recently, a decision of Canada's Federal Court (Starbucks (HK) Limited and Trinity Television Inc., 2016 FC 790) ("Starbucks") has clarified that, under certain circumstances, an official mark may be invalidated.

Background

Although official marks (which are sometimes referred to as "section 9 marks", because they are protected under section 9 of the Trademarks Act) bear some resemblance to trademarks, they differ in several significant respects. Most notably, an official mark can prevent others from using or registering an identical mark or any other mark that would be "mistaken for" the official mark regardless of the associated goods or services.

The most common type of official marks considered by Canadian jurisprudence are those defined in sub-paragraph 9(1)(n)(iii) of the Trademarks Act, which reads:

9(1) 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,

(n) any badge, crest, emblem or mark

(iii) adopted and used by any public authority, in Canada as an official mark for goods or services,
in respect of which the Registrar has, at the request of...[the] public authority...given public notice of its adoption and use.

Under this sub-paragraph, only "public authorities" can acquire official marks. Before granting an official mark, the Registrar will apply the following two-part test to determine if an entity qualifies as a public authority: (1) a significant degree of control must be exercised by the appropriate government over the activities of the body; and (2) the activities of the body must benefit the public. The clearest examples of public authorities are Canadian governments themselves, namely the federal government, provincial governments and municipal governments. However, the Trademarks Office has also determined that many non-governmental entities are also public authorities such as many Canadian lottery corporations, a number of Canadian research corporations and many other organizations.

Under current practice, before the Trademarks Office will grant an official mark, the applicant must prove that it is a public authority. Historically, however, the Trademarks Office was often prepared to accept an applicant's mere assertion that it was a public authority. Accordingly, numerous official marks were likely granted to entities that do not satisfy the two-part test.

Fortunately, the Starbucks decision demonstrates that judicial review is a possible avenue for trademark applicants to challenge the validity of certain official marks.

The Starbucks Case

On October 24, 2013, Starbucks filed a Canadian application to register the trademark NOW TV & Design (Application No. 1,649,254). The Trademarks Office objected to the application by citing official mark NOWTV (Serial No. 913,106), owned by Trinity Television Inc. ("Trinity"). At the time when the official mark was granted, Trinity was a Manitoba-based corporation operating as a registered charity, with one of its corporate objectives being to produce and distribute television programs conveying Christian teachings.

In response to the objection by the Trademarks Office, Starbucks brought a proceeding in the Federal Court for judicial review challenging the validity of Trinity's NOWTV official mark.

In the Starbucks decision, the Federal Court considered the following issues:

  1. Whether Starbucks had standing to bring the application for judicial review.
  2. Whether the Registrar's Decision was reasonable.
  3. Whether the Court should exercise its discretion to extend the time for making the application for judicial review beyond the 30 days allowed by subsection 18.1(2) of the Federal Courts Act.

On the issue of "standing", the court agreed with Starbucks that it was "directly affected" and had suffered a direct adverse impact from the existence of the official mark.

On review of the Registrar's decision to grant the official mark, the court relied on an earlier case which held that status as a charity does not, in and of itself, mean that the entity is a "public authority". Therefore, the court agreed with Starbucks that the Registrar's decision was unreasonable.

Finally, on the extension of time issue the court held that an extension of time was warranted despite Starbucks' delay to initiate the judicial review proceeding. This is an interesting result since the formal deadline for initiating judicial review is 30 days from notice of the decision of the Registrar to grant the official mark. The decision to grant the official mark was in 2001, namely 13 years before the judicial review proceeding.

As well, the official mark was cited more than one year before the judicial review proceeding. In any event, the court ruled that the delay in initiating the judicial review proceeding was acceptable for the following reasons:

  1. The Applicant's case on the merits was very strong.
  2. There was no prejudice to Trinity, who elected not to respond to the application for judicial review.
  3. There was a reasonable explanation for the delay. Although the Registrar's decision was made 13 years earlier in 2001, the official mark was only cited in the Examiner's Report on July 18, 2014, and the application for judicial review was commenced on October 5, 2015, within the time period for responding to the Examiner's Report.
  4. The Applicant would be significantly prejudiced if it were barred from the proceedings given the exceptional nature of rights conferred on the holder of an official mark. The court noted that there is essentially no other way to challenge an official mark, and that the entity originally requesting the official mark will normally be the only party to the proceeding before the Registrar.
  5. It would be patently unfair and completely contrary to the interest of justice if an entity that is not a public authority was permitted to enjoy the exceptional rights conferred on the holder of an official mark.

Accordingly, the court invalidated the official mark.

Options available to challenge a citation of an official mark

When assessing an objection or complaint based on an official mark, the first consideration is whether or not the mark in issue would be "mistaken for" the official mark. If so, it may be worth attempting to overcome the objection through argument. If that fails or is unlikely to succeed, other options are available.

As the Starbucks case highlights, while challenging the "public authority status" of an official mark holder will not be appropriate in every case, trademark applicants may wish to consider judicial review as an option where an official mark has been cited and where the owner of the official mark may not qualify as a public authority. Although not discussed in the Starbucks case, there are a number of other options available for overcoming a citation of an official mark.

For example, written consent from the public authority will overcome a citation. Alternatively, judicial review is also available in cases where the public authority did not adopt and use the official mark prior to the mark being advertised in the Canadian Trademarks Journal. As a final example, the Trademarks Office will withdraw a citation of an official mark when provided with evidence that the public authority no longer exists.

Because the law surrounding official marks is unusual to Canada and largely misunderstood even within Canada, it is recommended that any objections or complaints based on official marks be considered by trademark counsel with experience in the area of official marks.

For further information regarding this topic, please contact a member of our firm's Trademarks group.

The preceding is intended as a timely update on Canadian intellectual property and technology law. The content is informational only and does not constitute legal or professional advice. To obtain such advice, please communicate with our offices directly.

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Authors
Philip Lapin
Daniel Hnatchuk
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