Canada: Official marks can lead to damages for infringement of regular trademarks, according to Canada's Federal Court of Appeal

In brief

A recent decision from Canada's Federal Court of Appeal held that official marks do not enjoy any special protections against claims that they infringe on regular trademarks, so long as those trademarks were registered before the relevant official marks. Despite the special status for official marks in Canadian law, holders of official marks may nevertheless be liable for damages for trademark infringement.


Contents

Key takeaways

Holders of official marks may be liable for damages if their official marks infringe on other marks, so long as those other marks were registered before the registration of the official marks. If a public authority has caused confusion by using an official mark that infringes on a trademark that was already registered, then the trademark holder may bring an action for infringement. If the official mark is found to infringe on the trademark, the public authority may be forced to pay damages to the trademark holder.

In Canada official marks have extraordinary protection and can pose a significant obstacle to registration. Official marks enjoy exclusivity regardless of their goods and/or services and they block the use and adoption of any mark that consists of, or is so similar that it might be mistaken for, the official mark. The official mark need not be distinctive or have acquired secondary meaning. Once public notice (advertisement) of an official mark has been given, it is virtually non-expungable and exists in perpetuity unless the owner has it withdrawn.

In Quality Program Services Inc. v. Ontario (Minister of Energy) 2020 FCA 53, the Federal Court of Appeal held that an official mark does not confer any special protections against claims of infringement, nor against any other claims available under the Trademarks Act. Ontario's Ministry of Energy argued that official marks cannot be infringing, on the grounds that a mark's status as an official mark precludes any claim of infringement. The Court of Appeal, like the Federal Court, disagreed, and held that section 9(1)(n)(iii) of the Act does not provide any such protection: the Act allows holders of official marks to seek recourse against parties that infringe on official marks, but it does not insulate official marks from claims of infringement. The Federal Court of Appeal upheld the Federal Court's decision to award damages for infringement of the plaintiff's trademark. The Supreme Court denied leave to appeal.

Quality Program Services ("QPS"), an organization in British Columbia that raises awareness among new Canadians of energy-saving programs, applied for a trademark for the term "EMPOWER ME" in April 2013 and the mark registered on July 23, 2014. In November 2013, Ontario's Ministry of Energy launched a website about energy use called "emPOWERme". QPS learned of Ontario's website in late 2015 and subsequently wrote to the Ontario government requesting that they cease and desist using the term "emPOWERme". Ontario refused, arguing that (among other reasons) the Department of Energy was a public authority and was therefore entitled to hold official marks. QPS commenced legal proceedings in October 2016. Ontario applied to register "emPOWERme" as an official mark in December 2016, and the registrar gave public notice of the official mark in January 2018.

Official marks remain distinct from regular trademarks, but the court clarified that the unique features of official marks do not include protection from claims of infringement. The Federal Court explained this distinction: 

[T]he fact a public authority's mark may be confusing with another party's mark is not a basis for the Registrar to decline to give public notice and thereby confer official mark status upon the authority's mark, nor does such confusion present a basis to challenge the Registrar's decision to give public notice. However, [...] this principle is conceptually distinct from the question whether a public authority's adoption and use of an official mark which is confusing with a prior registered trade-mark may nonetheless constitute infringement under s 19 or 20 of the Act or support a claim for passing off or depreciation of goodwill under the Act (para 23).

The Federal Court's decision provides a detailed account of the law surrounding official marks, as well as the reasons why the particular features of official marks do not prevent them from being found to infringe on other marks that were registered before the official mark (2018 FC 971). 

The Federal Court of Appeal's decision is short and affirms the lower court's reasoning (2020 FCA 53).

The Supreme Court of Canada denied leave to appeal ([2020] SCCA No 139).


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