The Trademarks Act (the “Act”) contains a unique provision that allows “public authorities” to by-pass the normal trademark registration application process and to protect their “official marks” indefinitely. There is no similar provision in any other country’s trademark protection regime.

Subsection 9(1)(n)(iii) of the Act

So, what is an official mark? It is a trademark adopted and used by a public authority, for which public notice has been advertised by the Registrar of Trademarks, thereby rendering it a prohibited mark under subsection 9(1)(n)(iii) of the Act. Once advertised in the Trademarks Journal, no one else in Canada can adopt or use it.

Unlike the normal trademark application process, which costs considerably more and takes up to two years, official marks can be obtained by public authorities inexpensively in just a few months. More importantly, an official mark lasts forever, while an ordinary trademark registration must be renewed every 15 years (after June 17, 2019, that will be every 10 years) with additional fees payable for each renewal.

Another significant policing benefit of official marks is that examiners at the Canadian Intellectual Property Office must reject trademark registration applications for ordinary trademarks which are identical or similar to a previously published official mark.

Not long ago, any not-for-profit society or charitable organization could rely on its tax-exempt status to claim that it was a public authority entitled to obtain official mark protection under the Act. That liberal use of subsection 9(1)(n)(iii) ended in 2007 when the Federal Court of Appeal established a new judicial test applicable to official marks. Since that time, any organization hoping to protect its brand as an official mark must meet the following two-part test to determine whether it qualifies to be considered as a public authority under the Act.

Significant Governmental Control and Public Benefit Tests

Part 1: Does a Canadian government exercise a significant degree of control over the activities of the organization?

This stringent test essentially calls for ongoing government supervision of the activities of the body claiming to be a public authority. It must be a Canadian level of government (e.g. Federal, provincial or municipal; not foreign) and the control itself must be exercised within Canada. The control aspect of this test requires that the relevant government has the legislative power, directly or indirectly, to exercise a degree of ongoing influence on the body’s governance and corporate decision making. The fact that a body is created by statute (and can only change its mandate via legislation) is no longer enough to meet the current governmental control test.

Part 2: Do the activities of the organization benefit the Canadian public?

This less stringent test broadly examines the body’s functions, objects, duties, powers and activities. The threshold is easily met if there is any demonstrable benefit to the public at large, even if there is also a direct private benefit to members of the body. The public benefit need not be an enforceable public duty under a statute in order to meet this second part of the test.

Adoption and Use

If the public body applying to protect its brand meets that two-part test to be deemed a public authority, it must then demonstrate that it has in fact “adopted and used” the official mark to have it protected. Any evidence of public display of the official mark will suffice in that regard. For example, advertising the official mark on an active website is enough evidence of adoption and use to permit its advertising in the Trademarks Journal by the Registrar of Trademarks.

Bill C-86 – A New Limit is Imposed

As noted above, official marks confer very substantial benefits not available to owners of trademarks. They also have a tendency of injuriously affecting both existing trademark owners and the public in general by creating brand confusion in the marketplace. Crown corporations (e.g. provincial lottery commissions) are often guilty of monopolizing ordinary commercial words and expressions to the detriment of others using or hoping to trademark them. Another complication is that official marks can only be expunged using complex and costly judicial review procedures in Federal Court, so they were rarely challenged by affected third parties.

Last October 2018, the Federal government announced a new procedure in Bill C-86 to limit the unfair effects of official marks under subsection 9(1)(n)(iii). If the public body which has adopted and used the official mark no longer exists or cannot meet the two-part test of government control and public benefit, then the prohibition against third parties using it will no longer apply. As well, the Registrar of Trademarks will have the power, either by third party request or by itself, to publish a notice that an official mark is no longer a prohibited mark. This new process will eventually eliminate lingering official mark deadwood from the federal trademark register and adjust the playing field for all trademark owners in Canada.

For more information on trademarks, please contact our Trademark Agent, Marc Belliveau.