Tuesday, December 22, 2009

How to get a 27 year extension of time - attack an offical mark

Here's an article Matt Dugas, an articling student in our office, recently published on Lexology about a recent official marks case, where the court granted a 27 year extension of time to file for judical review. Official marks are an odd corner of Canada's Trade-mark Act - thus explaining the almost three-decade extension of time - but they are potentially very powerful, and the lack of detail in the supporting legislation makes them either a frustrating or fun topic to deal with (depending on your point of view - often depending on whether you are a plaintiff or defendant ;) ).

Official Marks: Judicial Review of 1982 Decision by Registrar of Trade-marks


In a recent Federal Court decision, Princess Group Inc. was permitted judicial review of a 27 year old decision of the Registrar of Trade-marks. Given that Judicial Review must be applied for within 30 days of a decision, how is it that Princess was able to obtain an extension of almost three decades? The answer lies in the complexities of “official marks”, which occupy an obscure corner of the Trade-Marks Act.


Official marks are marks adopted by “public authorities” and protected in Canada by their own unique but ill-defined legislative scheme. Official marks are both a powerful tool for public authorities (more powerful than a normal trade-mark) and a subject of controversy. Relevant issues include who qualifies as a public authority, the status of older marks of questionable validity, difficulties in opposing the official marks, whether judicial review is an appropriate venue for disputes, and how these issues interact with trade-marks and patents.

An example of the difficulties arising from official marks is the decision in Princess Group Inc. (“Princess”) v. Canadian Standards Association (the “CSA”). After being sued for infringement of CSA’s official mark, Princess applied for judicial review of the Registrar’s 1982 decision to give public notice of the official mark. It is suspected that Princess wishes to challenge the decision of the Registrar on the ground that the CSA is not a “public authority” and cannot own an official mark at all. Judicial review was granted for a decision that dates back a staggering 27 years.


Official Marks

A public authority is given protection of its official mark simply by asking the Registrar to give public notice of the mark’s adoption and use. Usually, public notice consists of publication by the Registrar in the Trade-marks Journal. Doing so prohibits any other person from adopting the mark or a similar mark in connection with a business, as stated in s. 9(1)(n)(iii) of the Trade-marks Act :

9. (1) No person shall adopt in connection with a business, as a trade-mark or otherwise, any mark consisting of, or so nearly resembling as to be likely to be mistaken for,
…….
(n) any badge, crest, emblem or mark

(i) adopted or used by any of Her Majesty’s Forces as defined in the National Defence Act,

(ii) of any university, or

(iii) adopted and used by any public authority, in Canada as an official mark for wares or services,

in respect of which the Registrar has, at the request of Her Majesty or of the university or public authority, as the case may be, given public notice of its adoption and use; (emphasis added)

Although based in the Trade-marks Act, an official mark is not a trade-mark. Compared to a trade-mark, an official mark is both more powerful and, if one is a public authority, easier to obtain.

An official mark is very powerful, primarily because of the broad protection granted in s.9(1)(n)(iii): “No person shall adopt in connection with a business, as a trade-mark or otherwise, any mark consisting of, or so nearly resembling as to be likely to be mistaken for” the official mark. Official marks are not limited to specific wares or fields of use. Official marks can also be used to restrain uses of marks that are not a “trade-mark use” – i.e. if a company is using a mark but not as an identification of source, an official mark may well be used to stop such uses whereas an identical trade-mark registration would fail. The only real limitation to an official mark is that a prior user of the same or similar mark may continue their use after the adoption of the mark by the public authority.

Official marks are easily obtained by a public authority. Section 9(1)(n)(iii) sets out simple and minimal requirements, namely that (1) the authority is a pub-lic authority, and (2) the authority has adopted and used a mark. The Registrar has virtually no discretion to refuse to give notice to the public of the adoption of an official mark (by advertisement in the Trade-marks Journal and in CIPO’s on-line data-base) if the requirements are satisfied . A request for an official mark is often kept confidential until the Registrar gives public notice that the mark has been adopted. It is up to the Registrar alone to determine whether the requirements are met, and there is no process whereby a third party would be informed of the process, no opposition mechanism, and no formal method for an opponent to make submissions to the Registrar. The Registrar may not refuse to give notice of its adoption and use on the ground that it is merely descriptive or is not distinctive of the authority’s wares or services. It is not necessary to describe the wares or services that the official mark will be associated with, and a previously registered trade mark by a third party is not a bar to the adoption of a similar official mark by a public authority. Finally, official marks cannot be challenged for subsequent non-use.




Public Authority Status


This scheme, which grants significant powers to the holders of official marks, places a heavy burden upon the Registrar to police who is a “public authority” under the statute. Whether a given body qualifies as a public authority has become increasingly contentious as public and quasi-public bodies are competing in the private sphere more frequently and wish to more aggressively protect their identifying marks.


Historically, there have been allegations that the Registrar has been too liberal with this requirement. It is thought that there are currently many dubious official marks that have been advertised belonging to parties that should not have been considered public authorities.

In the past, a requesting party simply had to provide the Registrar with a statement that it was a public authority, and the Registrar would proceed to give public notice of the adoption of the official mark. This practice was perhaps uncontroversial when few organizations (with clear and official government ties) pursued official marks, but over time this process resulted in considerable controversy and debate as more groups unilaterally claimed “public authority” status. Are trade associations, aboriginal groups, business associations, foreign public authorities, religious organizations, community groups, school boards, political parties, charities, special interest groups, or standards/quality assurance associations (such as the Canadian Standards Association) public authorities? Can the Olympic rings or aboriginal symbols be official mark of a public authority?

In response to critical Federal Court decisions, the Registrar of Trade-marks released a Practice Notice in 2002, the effect of which is that the Registrar now requires evidence of public authority status on every request to publish an official mark.

The Registrar follows a two-pronged test for deter-mining whether a body is a public authority. The first prong of the test is government control. The body must provide evidence of control that demonstrates ongoing government supervision of its activities, specifically that the government has continuous influence in the body’s governance and decision making process. It is not necessarily sufficient that a body is statutorily self-regulating.

The second prong of the test is public benefit. The activity of the body must benefit the public in Canada. Relevant considerations include the objects, duties and powers, and distribution of assets of the body.

While these tests will limit official mark’s public au-thority requirement from being construed too liberally in the future, what about older official marks that date back to the Registrar’s former broad acceptance of claimed public authority status?


Official Marks and the Princess v. CSA decision


In 1982, upon request by the CSA, the Registrar gave public notice of the adoption and use of an official mark. The official mark consisted of a large “C” enclosing a smaller “s” and “a”. The CSA is a “not-for-profit membership based association” that develops standards for business, industry, government and consumers.

In 2008, the CSA alleged that Princess offered wares that infringed CSA’s official mark, in violation of s.9(n)(iii) the Trade-marks Act.

Princess argued, as a defence, that the official mark should not have been accepted or advertised by the Registrar of Trade-marks in 1982 and sought judicial review. Presumably, Princess will argue that the Registrar’s actions were improper on the basis that the CSA should not have been considered a public authority for the purposes of s.9(1)(n)(iii), although the argument is not explicitly made in court proceedings to date.

Official Marks and Judicial Review


It is unclear, from reading the Trade-marks Act, whether and how a party can contest the adoption of an official mark. Section 57(1) of the Trade-marks Act allows any interested party can apply to the Federal Court to strike or amend any entry in the Register of Trade-marks; however, official marks are not listed in the Register. Section 56(1) of the Trade-marks Act creates a broad right to appeal to the Federal Court from any decision of the Registrar; however, it is suspected that only parties to the decision have standing for a right to appeal the decision. For an official mark, the only party to the Registrar’s decision is the public authority.

In 2002 this uncertainty was resolved by the Federal Court of Appeal in Assn. of Architects (Ontario) v. Assn. of Architectural Technologists (Ontario) (2002 FCA 218). The Court of Appeal ruled that in the vast majority of cases Judicial Review is the only possible way to challenge the validity of an official mark (although the decision allowed for the possibility that a third party could, in extremely rare cases, somehow be included as a party to the Registrar’s decision in accepting an official mark and therefore have standing to appeal under s.56(1)).

The 27 Year Deadline

Challenging an official mark through judicial review is a counterintuitive solution, and one that poses a number of concerns.

One limitation is the issue of standing. A party that is later sued has standing, as does a party that possessed a previous interest in the mark before the official mark was adopted by the public authority. It is doubtful that other parties, such as parties with general public interest concerns, would have standing for judicial review, although a person who has ap-plied for the same or a similar mark may have standing.

Tied to the standing issue is the issue of time limitations. Section 18 of the Federal Courts Act requires that an application for judicial review be commenced by a party that is “directly affected” within 30 days of the decision.

CSA argued in the Princess case that Princess was required to file their judicial review application within 30 days of the 1982 advertisement of their official mark – so Princess was seeking an absurd 27 year extension on the deadline. However, Prothonotary Milczynski and the Federal Court ruled that Princess only became “directly affected” by the decision when they received the CSA’s full statement of claim in April of 2009, and their 30 days in which to file for judicial review began to run on that date. It is uncertain how this would be applied if a party sought judicial review of an old official mark without being sued by the official mark owner.

As other holders of old official marks seek to enforce their marks, we may see a series of judicial review proceedings that become, as in the Princess v. CSA decision, comically out of whack with other judicial review proceedings.

The effect of the Princess decision is that Princess was not time barred from challenging the validity of the official mark through judicial review. If Princess successfully establishes that the Registrar should not have given public notice of the adoption and use of the official mark by the CSA, on the basis that the CSA should not have been considered a public authority or otherwise, then CSA’s mark will lose its protection as an official mark.

It remains to be seen whether the 27 year gap be-tween the Registrar’s decision and the judicial review proceedings has a significant practical impact compared to normally-timed judicial review proceedings. Among other challenges, Princess presumably will have to establish whether there was government control of the CSA in 1982, a question of evidence that may have disappeared over time. Hypothetically, a holder of an official mark could currently be a true public authority, but the mark could be revoked if it is determined on judicial review that it should not have been considered a public authority when the mark was originally advertised.

Accordingly, holders of some official marks may be reluctant to enforce their rights. In light of the uncertainty surrounding official marks, they may be concerned that challenging another party’s use of the mark may result in their mark being revoked. Instead of risking the loss of the mark, the holder may endure infringement by bolder parties while benefit-ing from the deterrent value the mark has on more cautious parties.


Application to Invalidation of Other Intellectual Property Rights

The use of Judicial Review as a backdoor defence against infringement, and a defendant to an infringement proceeding only becoming “directly affected” when infringement is claimed, may seem like a tempting option for defendants to investigate in response to patent or trade-mark infringement cases. Such a strategy, however, is not as promising as it seems.

The availability of Judicial Review is generally precluded when other forms of appeal or recourse are available. Official mark cases have been differentiated from patent cases in this regard . An “interested person” can bring an impeachment action against a patent after it is granted, and a party can seek to have an improperly granted trade-mark expunged from the Registrar.

The judicial review approach exists uniquely for official marks because there is no other apparent way to challenge the decision of the Registrar to advertise an official mark.


Conclusion


Although they are a part of the Trade-marks Act, official marks differ substantially from trade-marks in many respects. The protection created by the legislation is very broad and ill-defined, creating uncertainty both in the marketplace and in the courts.

While it has been settled in the courts that judicial review is the appropriate mechanism for contesting an official mark, the 27 year differential between the Registrar’s advertisement and the review in Princess is an example of the peculiar issues and considerations that can arise in these proceedings.

As public authorities are asserting their rights in the marketplace more aggressively, issues like this continue to highlight the shortcomings of the official marks regime. Accordingly, legislators may begin to question the policy basis for bestowing on public authorities the additional benefits an official mark – even if it may be warranted for government departments or offices, why do quasi-public organizations like the Canadian Standards Association require such a dramatic branding advantage in the market-place? Trade-marks could adequately protect the identifying marks of many public authorities without the complications and difficulties inherent in the official marks regime. Eliminating or limiting some aspects of the official marks system is a possible solution to the difficulties outlined above.