How Disparaging Trademarks are Treated in Canada

In the United States, cases challenging decisions of the United States Patent and Trademark Office’s refusing applications for the registration of disparaging marks have dominated trademark news for over 25 years, culminating in the decision from the Supreme Court of the United States in Matal v. Tam, in a case concerning the rock band “The Slants”.  In Canada, by contrast, there are few cases offering up even a hint of how this issue would play out in Canadian courts.

Section 9(1)(j) of the Canadian Trade-marks Act prohibits the adoption of “any scandalous, obscene or immoral word or device”.   A significant difference between the American and Canadian statutes on this issue is that in Canada, adoption of a mark contrary to S. 9(1)(j) is prohibited, as well as its registration, whereas in the United States only the registration of a disparaging mark is prohibited.

Whether the prohibition of a scandalous prohibited mark under S. 9(1)(j) would pass constitutional muster is a completely untested question, although the issue would be somewhat different than in the United States, because adoption of a mark is also prohibited, so it would not be an issue of trademark registrations as speech, but of the use of trademarks as speech.

Among the reasons why this provision is almost entirely untested in Canada is that Canadian Intellectual Property Office Examiners do not appear to issue refusals on this basis very often.  The Trademarks Examination Manual points to only one case where such a refusal was issued, namely application serial No. 409,882 for the registration of the design below: 

 Although it appears that objections have been raised for expletives, such as “fuck” and “bastard” in some cases, there are registrations in Canada for many slurs, including “ESKIMO”, “REDSKINS” and “FAG”.  It does not appear that Examiners are receiving guidance, nor is there any judicial guidance, about how to issue refusals based on Section 9(1)(j).

San Diego Comic-Con v. Salt Lake Comic Con - Beyond the Conventional Wisdom

Many brand owners mistakenly believe that obtaining a trademark registration is both the start and the end of what they need to do to protect their trademarks.  This fallacy is exemplified by a recent US case in which San Diego Comic Convention (SDCC) sued the owners of the Salt Lake Comic Con convention for infringing their COMIC-CON trademark. 

Ultimately, a jury found in favor of SDCC, but only awarded it $20,000 in damages, compared to the $6 million that SDCC had been seeking.  SDCC had to spend far more than $20,000 on this lawsuit, and had to defend their trademark against a counterclaim that their COMIC-CON trademark was generic, merely being a short form for “comic convention”.

Now that the lawsuit is over, SDCC still faces challenges with regards to their trademarks. Many other comic conventions around the world are still, despite this lawsuit, using the trademark COMIC CON in connection with their own conventions, and on the same range of goods and services that are protected by SDCC’s trademarks.

In Canada, SDCC has several trademark registrations for COMIC-CON, however, there are several comic conventions around the country that use the COMIC CON trademark, including:

·      Hamilton Comic Con

·      Central Canada Comic Con

·      London Comic Con

·      Niagara Falls Comic Con

·      Toronto Comic Con

This lawsuit will surely not be the last that SDCC will face alleging that the COMIC-CON trademark is generic and free to be used by anyone.

Trademark owners should be aware that a trademark registration is only the beginning of a trademark protection strategy.  It is also important to monitor whether any other parties in the marketplace are using your trademark, and to take action if they are.  Third party use of a trademark can be grounds to invalidate a trademark registration in Canada.

Trademarkia v. LegalZoom Lawsuit – Some Thoughts from Canada

In late December, LegalForce and Raj V. Abhyanker, who are associated with the trademark search-engine business Trademarkia filed a lawsuit for monetary and other relief against LegalZoom.  Abhyanker contends that he has lost $20,000,000 in sales because lawyers cannot provide services the same way that LegalZoom does.

In Canada, only trademark agents are permitted to represent clients before the Canadian Intellectual Property Office.  Trademark agents can be lawyers, but they can also be non-lawyers.  Both lawyers and non-lawyers who want to be trademark agents now need to pass a qualifying exam administered by the Canadian Intellectual Property Office, which can only be written after working in the field of trademarks for at least two years.

Being a non-lawyer trademark agent in Canada does come with certain limitations.  For example, if a potential infringement issue arises, a non-lawyer trademark agent is obligated to inform their client that they are not qualified to advise them on that issue and to refer them to a lawyer.  Additionally, if a client seeks advice on protecting their intellectual property and there are possible protections outside of trademarks, the trademark agent will have to refer the client to a lawyer who can advise them on copyright, industrial designs and other forms of IP protection in Canada.

Trademark agents are a self-regulated profession in Canada, but being a trademark agent does not excuse a lawyer from their ethical obligations owed to the provincial bar to which they are called.  Mr. Abhyanker does not want to have to put client money into trust, or to have to run conflicts checks, but the LegalForce website states that the firm does IP litigation as well as corporate law.  In Canada, even if a law firm has non-lawyer trademark agents prosecuting trademark applications, the Law Society rules still apply to the firm as a whole, and conflicts checks must be run and client funds must be put into trust accounts where required.  We are not aware of any circumstances in Canada where a law firm would not be subject to Law Society rules and regulations.

We will continue to follow the progression of this case from Canada.

Canada’s New Trademark Regime – Another Step Closer

As the latest step on the road towards the launch of Canada’s new trademark regime, slated to commence in early 2019, the proposed new Trademarks Regulations were published in the Canada Gazette on February 10, 2018.

The new regime will include legislative changes to permit Canada to implement the Madrid international registration system, the Nice Classification system, and the Singapore Treaty, and so the changes will be very significant and very broad in scope.

The draft Regulations were released by the Canadian Intellectual Property Office on June 19, 2017, and were open to public comment until July 21, 2017.  Various stakeholder groups, including the Intellectual Property Institute of Canada suggested changes to the Regulations during the consultation period, but a detailed comparison of the initial draft Regulations and the revised published Regulations shows that by and large these submissions were not accepted, and the Regulations remain largely unchanged.  A new thirty day consultation period is now open.

The revised Regulations cover a myriad of proposed changes, including:

·      Communications with the Canadian Intellectual Property Office;

·      Replacement of the Trade Marks Journal by publication on the CIPO website;

·      Applications covering non-traditional trademarks, such as scent, texture, taste, holograms, and moving images;

·      Merger of application fees and registration fees into a single application fee of $330.00 covering one class of goods and services, and $100.00 for each additional class;

·      Implementation of the Madrid Protocol system;

·      Introduction of divisional applications;

·      Compliance of new applications and existing registrations with Nice Classification requirements;

·      Narrowing of period for renewal of trademark registrations and new ten year renewal term;

·      Minor amendments to opposition practice and Section 45 summary cancellation proceedings, to streamline and modernize procedures relating to service of documents

Although changes to the draft Regulations were by and large not made during the initial consultation process, CIPO has indicated that draft Practice Notices will be prepared to assist with the interpretation of the Trade-marks Act and Trademarks Regulations amendments. Given the significance of the changes, these Practice Notices could assist in addressing many of the still unanswered questions relating to the new trademark regime.

Section 9 Official Marks in Canada – Finding Cracks in the Shell

Section 9 official marks offer those entities entitled to this special form of protection significant rights over regular trademark registrations.

Under Section 9(1)(n)(iii), the “public authority” which has its mark published under this provision obtains broad coverage for all goods and services, regardless of how the mark is used, and the official mark is not subject to either opposition or to any renewal requirements.

Accordingly, when regular trademark applicants receive objections based on Section 9 marks, these objections are often fatal, barring situations where the Section 9 rights holder is prepared to grant a consent to the registration.

Trademark applicants are therefore often anxious to discover ways to counter such objections.  One method is to remove the official mark by way of judicial review, by establishing that the holder of the Section 9 mark did not or no longer meets the requirements for holding the rights.

In one recent example, this challenge was successful.  In Starbucks (HK) Limited v. Trinity Television Inc., 2016 FC 790 (CanLII), the Section 9 mark for NOWTV had been obtained in 2001 on the basis that the applicant was a charitable organization.  On the judicial review, it was held that simply being a charitable organization did not result in the applicant from meeting the requirements to establish that it is a “public authority”.   The Federal Court therefore held that the Registrar’s decision to publish the official mark had been unreasonable, in the absence of evidence showing both that the applicant was subject to significant governmental control, in addition to being engaged in activities that benefit the public. The official mark was therefore quashed and set aside.

This case illustrates an option for trademark owners seeking to register marks which are close to official marks which may no longer meet the criteria to establish that they are owned by a “public authority”.

Canada Celebrates 150 Years

Canadian certificates of trademark registration and renewal are looking a bit different this year.  The certificates, along with copyright registrations, have been reflected to update the fact that Canada is celebrating its 150th birthday in 2017. 

The Canada 150 Logo that has temporarily replaced the other maple leaves that used to grace the certificates was designed by Toronto student Ariana Cuvin.  Cuvin’s design was selected from over 300 designs submitted by students across Canada in a contest that was not without controversy.

A version of the logo was published in December 2, 2015 edition of the Canadian Trade-marks Journal.  Under Section 9(1)(n)(iii) of the Canadian Trade-Marks Act, prohibits anyone from adopting as a trademark any mark used by a public authority in Canada, where the Registrar has given public notice or its adoption and use.  The Publication No. for this logo is 923,450.

Bad Faith in Trademark Applications

While there is no “bad faith” ground of opposition set out in the Canadian Trade-marks Act, the Trade Marks Opposition Board does have the power to refuse what they consider to be “bad faith” applications, using other grounds of opposition. These grounds of opposition include allegations of non-distinctiveness, non-entitlement, non-registrability, and the allegation that the applicant could not have been satisfied that it was entitled to use the trademark.

Bad faith cases often have extreme facts that cry out for action on the part of the Opposition Board in order to prevent the bad faith applications from issuing to registration, and in such cases, the Board is understandably willing to make the facts fit within the allowed grounds of opposition.

In a recent case determined by the Federal Court of Canada, Julia Wine Inc. v. Les marques metro, S.E.N.C., (Les marques métro/metro Brands S.E.N.C.), 2016 FC 738 (CanLII),  the Court sided with the Opposition Board in holding that a trademark application which was characterized as exhibiting “bad faith” should not succeed.  The indicia of bad faith which were exhibited in the case included the following facts:

1.  The applicant filed applications on the same day for the registration of the house brand trademarks of 3 different major supermarket chains; and

2.  In a meeting between the applicant and the opponent, the applicant had proposed to the opponent a distribution arrangement for goods to be sold under the applicant’s trademark, and the assignment of the trademark to the opponent.

The TMOB refused the application, and the Court concurred.