The Superior Court of Québec, under the pen of Justice Michel Yergeau, granted a declaratory judgment that maintains the status quo of the well-known trade-mark exception for public signs and posters and commercial advertising. The awaited decision on April 9, 2014 settled the question outlined in our September bulletin.

This decision is consistent with what was allowed by the Office québécois de la langue française ("OQLF") for the past 20 years before it recently changed its interpretation of the Charter of the French Language (the "Charter"). The Court declared that the exception found in section 25(4) of the Regulation Respecting the Language of Commerce and Business (the "Regulation") authorizes businesses in Québec to use registered trade-marks, exclusively in a language other than French, on the signs outside their premises without the need of adding French generic language to their trade-marks, provided that no French version of said trade-marks had been registered.

The Court concluded that the trade-mark exception should be maintained despite the position recently taken by the OQLF in which it blurred the line between trade-mark use and trade name use. Since 2011, the OQLF adopted an administrative position, whereby it treated registered trade-marks appearing on storefront signs as trade names. By doing so, the OQLF subjected trade-mark owners to the requirements of section 27 of the Regulation. Pursuant to section 27 of the Regulation, "an expression taken from a language other than French may appear in a firm name to specify it provided that the expression is used with a generic term in the French language." After the adoption of this new interpretation by the OQLF, many retailers that had used English-only registered trade-marks on signs outside their premises were threatened by the OQLF with statutory sanctions for non-compliance with language requirements.

In order to justify his decision that trade-mark use should not be confused with trade name use, Justice Yergeau not only adhered to the conclusions sought by the Plaintiffs (Best Buy, Costco, Gap, Old Navy, Guess, Wal-Mart, Toys "R" Us and Curves International) and to the applicable principles of statutory interpretation, but also canvassed the underlying linguistic objectives that the Charter and the Regulation aim to protect in Québec.

Moreover, the Court declared that the OQLF's previous practices in allowing the unhampered application of the trade-mark exception for almost two decades, as well as the legislator's clear choice in creating a different legal regime for the use of registered trade-marks, were appropriate and compelling reasons to defeat the recent interpretation adopted by the OQLF and to preserve the status quo of the trade-mark exception.

In the wake of this decision, it is clear for the time being the Charter and the Regulation allow businesses in Québec to use their registered non-French trade-marks, particularly on storefront signs, without the need of adding French generic language to their trade-marks. This is provided that no French version of said trade-marks had been registered. It is now up to the Attorney General of Québec to decide whether or not to appeal this decision.

Justice Yergeau did not deal with unregistered or "common law" trade-marks in his judgement, so it is currently unclear how the OQFL will treat common law trade-marks. Accordingly, owners of English-only trade-marks should consider registering their trade-marks in Canada so that the exception in the Regulation will clearly apply to those marks.

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