EMPOWER-ing trademark infringement claims against public authorities

Official marks are a unique quirk of Canadian trademark law. Under the Trademarks Act, official mark protection may be obtained for any mark being used by a Canadian public authority, which gives the authority the exclusive use of its official mark – at least relative to subsequent users of the same mark or a mark likely to be mistaken for it – for all goods and services.

But what happens if a public authority adopts a mark that is identical or similar to a third party’s pre-existing mark? The act is silent on this issue. Official mark protection is formally granted on request, without any search for prior marks or an opposition process. However, the recent case Ontario (Energy) v Quality Program Services Inc (2020 FCA 53) confirms that official mark protection does not shield a public authority from an infringement challenge if the authority uses an existing or confusingly similar third-party mark.

In the case, the plaintiff Quality Program Services Inc (QPS) owned the trademark EMPOWER ME for various energy-related services and had obtained a related trademark registration in 2014. In 2018 QPS discovered that defendant Ontario (Energy) had started using the mark EMPOWERME in connection with a website for electricity services. Therefore, it brought an action against Ontario claiming damages and other relief for trademark infringement, passing off and depreciation of goodwill.

In response, Ontario requested that the Trademark Registrar grant official mark protection for its emPOWERme mark under the Trademarks Act, arguing that such protection should shield it from QPS’s challenge.

The Federal Court disagreed (2018 FC 971), holding that Section 9 of the act did not insulate Ontario from the challenge; rather, Ontario’s use of the identical mark infringed QPS’s rights. Accordingly, the court granted a C$10,000 damage award to QPS, plus costs (2019 FC 19).

In particular, the court found that the Trademarks Act did not give public authorities any “particular protection against claims for trademark infringement or other claims”. That said, the court noted that Ontario had not argued that a commercial purpose was required for its activities to constitute trademark infringement. Therefore, the court did not make a definitive conclusion on the point, leaving the question open for future litigants. Instead, the court held that the marks were confusingly similar and that Ontario’s mark constituted infringement “in the absence of any compelling argument that Ontario is not using its mark in association with the distribution of a service as contemplated by [the Act]”.

Ontario’s appeal to the Federal Court of Appeal was dismissed in February 2020, as was a subsequent request for leave to appeal to the Supreme Court of Canada in October 2020. 

Comment

The case proves that public authorities are not shielded from trademark infringement claims even where they have adopted, used and obtained protection for an official mark. That said, it leaves open the question whether a public authority could successfully argue that its activities do not constitute trademark infringement under the Trademarks Act if their activities lack a commercial purpose.