Bill C-30 and the Comprehensive Economic and Trade Agreement – Implications on the Trade-mark Act

Bill C-30 was introduced on October 31, 2016, to implement the Comprehensive Economic and Trade Agreement (“CETA”) between Canada and the European Union (“EU”). CETA has been negotiated for a number of years, is intended to facilitate several areas for trade between Canada and the EU and was signed on October 30, 2016. To help achieve this goal, the Bill includes a number of proposed amendments to the Trade-marks Act in addition to other legislation.

The amendments to the Trade-marks Act are primarily focused on geographical indications (“GIs”). Currently, a GI is defined in as an indication or sign that identifies a wine or spirit as originating in the territory, region, or locality of a member of the World Trade Organization, where a quality, reputation, or other characteristic of that wine or spirit is attributable to its geographic origin. The rationale behind GIs is that certain words create such a strong connection between a good and its geographic origin that the use of a GI on any goods that do not originate from the same geographic region is thought to be misleading. Examples of this would be wine made from Napa Valley in the United States, or Canadian Rye Whisky. In Canada, applicants are prohibited from using a GI in relation to wine and spirits not originating in the territory indicated by that GI, and are also prohibited from registering protected GIs as a trade-mark with the Canadian Intellectual Property Office (“CIPO”).

Bill C-30 has now proposed amendments which will impact not only the use but also the registration of GIs. Significantly, the Bill has proposed that the definition of GIs be extended to account for “agricultural product and food” in addition to wine and spirits, including baked goods, cheeses, meats, oils and spices, and cereals; exceptions to this include common English and French names for certain agricultural products or foods such as “Black Forest Ham”, “Parmesan”, and “Valencia Orange”. Any protected GIs will no longer be able to be used (as a trade-mark or otherwise) if the agricultural products or foods are not produced under the rules of that region nor originate from that region, and use of a protected GI on any foods or agricultural products that are in the same category as the protected GI will be prohibited. Trade-marks that consist of protected GIs identifying wine, spirits, agricultural products or food that do not originate from the applicable region will also be unregistrable with CIPO, and customs request for assistance procedures under the Trade-marks Act will become available for protected GIs. In addition, Canadians will be prohibited from importing or exporting wine, spirits, agricultural products or food if a protected GI is displayed on the labels, packaging, or the goods themselves and the goods do not originate from the territory indicated and/or were not produced in accordance with the laws of that territory, unless such goods were imported or exported for personal use or passed through Canada in transit between two locations outside of Canada.

It is also worth noting that Bill C-30 sets out grounds for removing a GI from the list of protected GIs, including where the impugned indication is not a GI, the GI is the common name for a product or food, or the GI is confusing with a registered or previously used trade-mark in Canada. Exemptions to removal are set out for certain European and Korean GIs.

While CETA likely will not come into force until 2017, trade-mark owners and potential applicants in the wine, spirits and food products industries should be aware of and carefully consider how the above changes could impact their proposed applications and registrations. While Bill C-30 has proposed a series of transitional provisions that permit uses of certain marks that are GIs for a period of time after the amendments have come into force, once these amendments do come into force, agricultural products or foods that were previously impugned, may eventually be subject to any restrictions and/or labeling requirements in order to comply with CETA.


Trader Joe’s trying to make Pirate Joe’s “walk the plank” in U.S. trade-mark case

In the ongoing dispute between Michael Hallatt, a Vancouver businessman, and U.S. based retailer Trader Joe’s, the United States Court of Appeals for the Ninth Circuit (the “Ninth Circuit”) has overruled the 2013 decision of the U.S. District Court for the Western District of Washington (the “District Court”) not to hear Trader Joe’s claim against Hallatt for, among other things, trade-mark infringement, dilution, unfair competition and false advertising.

The dispute arose out of Hallatt’s purchase of products from Trader Joe’s stores in the U.S., particularly in the state of Washington, for resale in Canada (there are no Trader Joe’s stores in Canada).  Hallatt has and continues to mark up and re-sell Trader Joe’s products at his store in Vancouver, named Pirate Joe’s.

The goods are not counterfeit, and the source of the products being sold is not in dispute – the packaging on the products bears Trader Joe’s trade-marks, and Hallatt states on his website that he sells Trader Joe’s products.  Hallatt expressly states on his website that he is not an authorized or affiliated distributor or reseller of Trader Joe’s.  Nevertheless, Trader Joe’s took the view that Hallatt’s conduct violated its U.S. trade-mark rights under the U.S. Lanham Act, and in 2013 it brought a claim against Hallatt in the District Court.

Taking the view that any unlawful conduct by Hallatt would have taken place in Canada rather than the U.S., and that Hallatt’s activities did not cause a cognizable injury to Trader Joe’s in the U.S. or an effect on American foreign commerce, the District Court judge decided in October 2013 that the Court had no subject matter jurisdiction to hear Trader Joe’s claims.  Trader Joe’s appealed that decision to the Ninth Circuit.

The Ninth Circuit disagreed with the District Court judge, opining instead that Hallatt’s activities could affect the goodwill and value of the Trader Joe’s brand in the U.S., and accordingly, its U.S. trade-mark rights.  The Ninth Circuit concluded that the Lanham Act does apply to Hallatt’s allegedly infringing conduct, and in the result, remanded the case back to the District Court for further proceedings.

We will be keeping an eye on this trade-mark case that is likely of particular interest to cross-border shoppers.

In no mood for charity: Federal Court confirms that charities are not necessarily public authorities

The Federal Court of Canada recently confirmed in Starbucks (HK) Limited v. Trinity Television Inc., 2016 FC 790 (the “Decision”) that status as a charity is, in and of itself, insufficient to constitute an entity as a public authority for the purpose of obtaining an official mark.

(For a discussion about official marks and their interplay with regular trade-marks, please see this previous post on our blog.)

The facts leading up to the Decision are straightforward: in 2013, Starbucks (HK) Limited (“Starbucks”) filed an application to register the trade-mark NOW TV & Design.  During prosecution, an official mark for NOWTV, owned by Trinity Television Inc. (“Trinity”), was cited against the Starbucks application.  In response, Starbucks commenced a judicial review application against the Registrar’s decision – made in June 2001 – to give public notice of the adoption and use of NOWTV as an official mark.

In the result, the Court quashed the Registrar’s decision to grant NOWTV as an official mark to Trinity, clearing the path for Starbucks to move ahead with its application.  Of particular interest were the following points made by the Court:

- the law is now clear that status as a charity is, in and of itself, insufficient to constitute an entity as a public authority; and

- it would be patently unfair and completely contrary to the interest of justice if an entity that is not a public authority was permitted to enjoy the exceptional rights conferred on the holder of an official mark.

As a potential point of distinction when it comes to the precedential value of this case, it is noteworthy that Trinity did not participate in the judicial review application; indeed, the Court was advised by counsel for Starbucks that a former president and director of Trinity had advised that Trinity had sold its business to Rogers in 2005.  That being said, given how easily the Court arrived at the conclusion that charitable status does not necessarily equate to being a public authority, it seems unlikely that Trinity’s participation would have changed the result.

From a practical perspective, the Decision serves as a timely reminder to trade-mark applicants that, while robust, official marks can nevertheless be challenged and removed under the right circumstances.  Where an official mark has been cited during prosecution of a regular trade-mark application, it is important to carefully scrutinize the official mark, in order to ascertain any potential vulnerabilities that could lead to its removal.

On the other hand, the Decision is also a reminder to charities holding official marks that those official marks may potentially be at risk, if challenged via judicial review.  To mitigate that risk, those charities ought to consider filing regular applications to register their trade-marks.

About the Blog

The authors of the Canadian Trademark Blog are all members of the Canadian law firm Clark Wilson LLP, based in Vancouver, Canada. Each author's practice focuses–either in whole or in substantial part–on Canadian intellectual property law. Together, they manage the trade-mark portfolios of local, national and international brand owners in nearly all industries and markets.

The Authors