Federal Court: protection for official marks may end with dissolution of owner

Comments made in TCC Holdings Inc v The Families as Support Teams Society (2014 FC 830) suggest that the protection for an official mark may end with its owner.

Under Section 9(1)(n)(iii) of the Trademarks Act (RSC 1985, c T-13), official marks adopted and used by public authorities have a unique status in Canada: they do not have to be registered, only advertised. Traditional bars to registration (such as confusion with an existing mark, descriptiveness, geographical designations, or words that are primarily merely names or surnames) do not apply. Further, unlike traditional trademarks, the scope of protection offered to official marks is not restricted to any specific list of wares or services.

Since these official marks are not registered, they do not need to be renewed. Official marks used or adopted by public authorities have theoretically infinite terms of protection once they have been advertised.

In an application for judicial review brought under Section 18.1 of the Federal Courts Act (RSC 1985, c F-7), the Federal Court held that the Family and Support Teams Society was not a 'public authority' within the meaning of Section 9(1)(n)(iii) of the Trademarks Act at the time its mark was advertised. As a consequence, the public notice of the official mark F A S T was ineffective to give rise to any rights or prohibitions under Sections 9 or 11 of the act.

While the term 'public authority' is not defined in the act, the Federal Court of Appeal previously established the following two-part test to determine whether a party qualifies as a 'public authority' for the purposes of Section 9(1)(n)(iii) of the act: (1) the body using or adopting the official mark must be subject to a significant degree of governmental control, and (2) the organisation’s activities must benefit the public (Ontario Assn of Architects v Assn of Architectural Technologists of Ontario (2002 FCA 218 [Paragraphs 47-53])).

Subsequent to the court’s decision in Canadian Jewish Congress v Chosen People Ministries Inc ([2003] 1 FC 29), being incorporated as a non-profit corporation with charitable objects, having obtained tax-exempt status and having the ability to issue tax receipts to donors has been viewed as insufficient to consider a party a 'public authority' within the meaning of Section 9(1)(n)(iii) of the act. On this basis, the Family and Support Teams Society was not entitled to the protection conferred on its F A S T mark, and the advertisement was found to be ineffective to give rise to rights or prohibitions in its favour.

However, the court went beyond this conclusion, adding:

“Even if [the society] was a public authority at that time [of advertisement]… in my opinion at the time that its charitable status was revoked and the respondent was dissolved, the respondent ceased to be a public authority.”

As an effect of this change of status, “the respondent is not entitled to benefit… as a public authority in respect of an official mark of which the registrar gave public notice of adoption and use”.

These remarks are notable as they reflect a broader shift within the Canadian legal environment with respect to official marks. Most decisions involving official marks focus on the status of the relevant public authority at the time public notice is given. According to an earlier decision of the Court in Mihaljevic v British Columbia ([1998] 23 CPR (3d) 80), once official marks have been advertised in association with a qualifying public authority, they are “hardy and virtually unexpungeable” [at 89]. Yet this decision (along with a private member’s bill recently introduced in Parliament - Bill C-611) suggests that is about to change.

Bill C-611 received its first reading in June 2014. The bill seeks to remove some of the broad protections afforded to official marks under the current act. Most notably, the bill would allow for a three-month period after public notice has been given of the adoption and use of an official mark during which any person interested may file a statement of objection. The bill allows for objection based on five grounds, paraphrased below:

(a) the mark has not been adopted or used in Canada by the public authority;
(b) the body that requested the registrar to give public notice is not a public authority;
(c) the mark is identical to, or so nearly resembling as to be likely to be mistaken for, a prior registered trademark, and may significantly undermine the ability of the trademark owner to fully exploit its trademark, or may result in confusion;
(d) the mark is a generic term; or
(e) the granting of the official mark does not serve the public interest.

The bill also provides that public authorities are required to make a request for renewal within 10 years of the previous public notice, ending the indefinite protection granted to such marks.

Interestingly, the bill contains transitional provisions which make existing official marks subject to renewal 10 years after the provisions come into force. Another transitional provision allows for a statement of objection to be made for any official mark within three months of the bill’s coming into force – a provision which could lead to a tidal wave of objections in its first three-month period, were the bill to become law.

As a private member’s bill, Bill C-611 may not become part of Canadian trademark law any time soon. Nevertheless, the bill demonstrates the misgivings some members of the trademark community have towards the broad protection granted to official marks. Elements of the bill may find their way into legislation in the future.

David Bowden and Leigh Walters, SIM. IP Practice, Toronto