With the International Trademark Association (“INTA”) leadership meeting just around the corner, taking place on November 15 to November 19, Fasken’s Intellectual Property team presents to you the second part of a two-part bulletin discussing the top trademark developments in Canada. Read the first part of the bulletin, "Top Trademark Developments in Canada – Part I".
1. Use of Trademark May be Demonstrated Without Brick-and-Mortar Location
In a highly anticipated decision, the Federal Court of Appeal (“FCA”) provided some clarity on the appropriate evidence to demonstrate the use of a trademark for certain online services in Canada. In Miller Thomson LLP v. Hilton Worldwide Holding LLP, 2020 FCA 134, the FCA found that the defendant, Hilton Worldwide Holding LLP (“Hilton”), had used its trademark WALDORF ASTORIA in association with “hotel services” in Canada, despite the absence of a brick-and-mortar location of the establishment in Canada.
The FCA accepted that the performance of ancillary services can constitute use in Canada in association with “hotel services” as long as Canadian consumers, purchasers or members of the public derive a “material benefit” from these services without leaving the country. Whether this test is satisfied or not will turn on the quality of the evidence provided by the trademark owner. The FCA expressed that online ancillary services at issue must give rise “a sufficient degree of interactivity between trademark owner and Canadian consumer […].”[1] Mere access to a passive website by Canadians would not be sufficient. In this instance, the FCA noted in particular that discounts could be obtained when booking from Canada, that points collected through bookings could be used in hotels located in Canada, that confirmatory emails bearing the mark were sent to Canada. The number of accesses and transactions made by Canadians appears to have carried some weight. The FCA was careful not to set hard and fast parameters. This decision is starting to give rise to a significant body of case law regarding what types of “benefits” may be sufficient or not. Leave to appeal to the Supreme Court of Canada was refused.
2. Trademarks: The Fastest Growing IP Activity in Canada
Every year, the Canadian Intellectual Property Office (“CIPO”) publishes a report in which it provides an overview of intellectual property activity in Canada. In its most recent report, the IP Canada Report 2020 (the “Report”), CIPO has indicated that trademarks constitute the fastest growing IP activity in Canada. This is notably due to Canada’s accession to the Madrid Protocol in June 2019, which continues to result in considerable increases in both non-resident and resident trademark filings in the country. The success of the Madrid Protocol filing route can notably be explained by its processing time of 18 months. This can be contrasted with CIPO’s current processing time of trademark applications, which may take over two years. It therefore may be sometimes more advantageous to proceed through the Madrid Protocol to register a trademark in Canada.
3. Absent Fraud or Bad Faith, Trademark Registration is a Complete Defence Against Infringement and Passing Off Claims
In Canada, trademark registrations constitute a complete defence to a claim for damages or for an accounting of profits for the entirety of the period during which the registration is valid (i.e. until it is invalidated through a decision of the Federal Court). This is the conclusion reiterated by the Federal Court of Appeal (“FCA”) in Group III International Ltd. v. Travelway Group International Ltd., 2020 FCA 210. This case involved Wenger, the Swiss company behind the “Swiss Army Knife”, and Travelway, a Canadian luggage distributor, which both owned Canadian trademark registrations that incorporate a cross evocative of the Swiss flag. In previous proceedings, Travelway’s trademark registrations were invalidated on the grounds of confusion with Wenger’s trademarks. Wenger sought financial compensation from the moment that the respondent started using the infringing trademarks, despite its then valid registrations. The FCA, however held that if fraud, willful misrepresentation or bad faith in connection with the registration can be shown, the shield could be broken and the registered owner could be liable to pay damages or disgorge profits even though the defendant held a registration. This makes it important to bring to the forefront evidence of such fraud, willful misrepresentation or bad faith in cases where the defendant owns a registration. In this case the plaintiff did not succeed in doing so.
Wenger sought leave to appeal of the FCA decision, which was dismissed by the Supreme Court of Canada on September 29, 2021.
4. Official Marks Are Not a Defence to Trademark Infringement
Anyone that has applied for a trademark registration in Canada has undoubtedly stumbled upon official marks. Official marks are a unique and noteworthy feature of Canadian trademark law. They are marks published by a public authority in Canada that prohibit others from adopting or registering trademarks that are identical or confusingly similar, irrespective of the nature of the associated products or services. While official marks are afforded a broad scope of protection, a recent Federal Court of Appeal (“FCA”) decision reminded public authorities that the benefits of securing an official mark are not infinite. In Ontario (Energy) v. Quality Program Services Inc., 2020 FCA 53, the FCA held that the official mark status does not confer a public authority any particular protection from claims for trademark infringement or other claims. Like any other trademark user, a public authority that chooses to use a mark that is confusing with a registered trademark runs the risk of being sued by the rights holder having senior rights. This will undoubtedly be a relief for many private parties.
5. Importance of Registering Non-French Trademarks Used in Quebec
On May 13, 2021, the Quebec Government introduced Bill 96, An Act respecting French, the official and common language of Québec (the “Bill”). This Bill, which is likely to be adopted before the end of the year, will introduce important restrictions to Quebec’s existing French language legislation. Notably, the Bill provides that a non-French trademark may only appear on public signs, posters and commercial advertising if the trademark is registered under the Trademarks Act and that no corresponding French version is registered.[2] Thus, it is anticipated that non-French common law trademarks can no longer be displayed on public signs, posters and commercial advertising if they are not registered. Do note that under Bill 96, public signs and posters visible from outside premises that contain a non-French registered trademark will also need to be accompanied by a “markedly predominant” presence of French. This is currently defined as having French inscriptions that are twice as large as the non-French inscriptions.[3] This may force changes to a considerable number of public signage. A transition period is provided to allow the necessary changes to be made. For more details on the trademark-related implications of Bill 96, see our bulletin, "Trademarks and Language: The Potential Impacts Of Bill 96", on the matter.
[1] Miller Thomson LLP v. Hilton Worldwide Holding LLP, 2020 FCA 134, para 147.
[2] An Act respecting French, the official and common language of Québec, s. 47
[3] Regulation defining the scope of the expression “markedly predominant” for the purposes of the Charter of the French language, ss. 1 and 2.
