Canadian official marks can infringe the rights of prior trademark owners

As Canadian trademark applicants sometimes discover to their chagrin, it is not just regular trademarks that can be cited against their applications – they may also be blocked by a range of prohibited marks, including the unique sub-category of official marks.

An official mark is any mark adopted and used by a Canadian public authority, for which notice has been published in the Trademarks Journal. Though the official mark regime was intended to allow governmental and quasi-governmental agencies to easily protect marks used in connection with public services, no restrictions were placed on what these marks could be or with what they could be used. As such, common phrases with no inherent governmental association – for example, SEASON'S GREETINGS, PLAY SAFE and HAPPY HOLIDAYS and even words such as ONE and ENGINEER – are all protected as official marks under Canadian law.

Complicating matters is the fact that official mark holders enjoy extremely broad rights. They enjoy exclusive use of their mark for all possible goods and services, in contrast to regular trademark holders whose rights are limited to specific claims. Official mark examination is also perfunctory: so long as the requestor (ie, applicant) qualifies, there is no consideration of the mark itself. As such, marks that may otherwise not be registrable as regular trademarks (whether for descriptiveness or confusion, among other things) can become official marks.  There are no avenues to oppose official marks, and once published, they never expire.

Further, local law prohibits the adoption, use or registration of a trademark that consists of, or so nearly resembles as to be mistaken for, an official mark. This means that it is irrelevant if a proposed trademark owner plans to operate in a completely different sphere from the public authority; the prohibition still applies to all goods and services.

This raises the question of whether the adoption and use of an official mark can lead to the extinguishment of the rights of and possible claims by a prior trademark owner.

The Canadian Federal Court of Appeal recently considered this issue when a governmental agency adopted emPOWERme as an official mark subsequent to a private company registration of EMPOWER ME as a regular trademark. Both parties operated in the energy sector.

In its decision the court acknowledged the power of the official mark, but emphatically rejected the notion that this somehow eliminated other prior rights. It noted that, in regard to the local law: 

In no way does the [legislative] text confer on the public authority any particular protection against claims for trademark infringement or other claims under the [Canadian Trademarks] Act. A public authority that chooses to use a mark that is confusing to a registered trademark does so at its peril. Clear legislative wording would be required to effect a different result. [Ontario (Energy) v Quality Program Services Inc, 2020 FCA 53, at para 4].

As such, the court concluded that the governmental agency, through use of its official mark, infringed the trademark owner’s prior rights. 

Of course, establishing infringement involves a finding of confusion, which encompasses several factors including the nature of the goods/services and nature of the trade, which were both similar in this case. In a context where an official mark holder is doing something entirely unrelated to the trademark owner, there may not necessarily be a finding of infringement even if the same mark is at issue.

The key takeaways for both trademark owners and official mark holders are:

• A subsequently adopted official mark is not a shield to claims for infringement or passing-off in relation to a prior used and/or registered regular trademark.
• While official marks theoretically cover all goods/services, it does not follow that in the case of subsequent adoption of an official mark identical with a prior trademark that  there is an automatic finding of infringement or passing-off; rather, the actual goods/services and nature of trade at issue for the official one will have to be considered in a standard trademark confusion analysis.
• Once an official mark has been adopted, there are implications for the owners of similar marks, based on the timing of this adoption:
  • where the official mark adoption came first, a regular trademark owner will now need consent of the public authority to use or register that mark for any goods or services – regardless of the actual goods/services or nature of trade of the public authority; and
  • in contrast, where the regular trademark came first, Canadian law does allow the use of the regular trademark to continue. However, this is limited to those goods/services in association with which the trademark is used at the time the official mark is adopted. Essentially, this freezes the rights of the regular trademark holder, such that they cannot subsequently broaden their use without the public authority’s consent.

Comment

The users and owners of both official marks and regular trademarks should conduct the appropriate clearance before they begin adopting and using any of them, mindful of the interaction between them under Canadian law.