Canadian Court Cancels Trademark Registration Obtained in Bad Faith -a First

The 2019 changes to the Trademarks Act (the “TMA”) introduced a requirement that trademark applicants not file applications (nor obtain registrations) in “bad faith”. Though this has been part of Canadian trademark law for nearly 3 years, courts had yet to use the provision empowering them to cancel a trademark registration obtained in bad faith. This has now changed, thanks to a recent decision by the Federal Court, in Beijing Judian Restaurant Co. Ltd. v. Meng (2022 FC 743).

The case at issue basically stems from an individual becoming aware of a well known trademark, as used in China for restaurant services, and managing to secure a registration for that mark, before the actual owner really brought the mark to Canada. Yep, this is a story of good old fashion trademark piracy.

Fortunately for the good guys, given the 2019 additions to the TMA, brand owners now have a new tool with which to combat such high-handed attempts to squeeze and essentially defraud them. If they are reasonably quick, the first thing they can do, once a fraudulent application is advertised in Canada, is to oppose the application, based on the new ground of bad faith. Alternatively, if they fail to oppose and the mark actually gets registered by the bad guys, the real owner may attack the resulting registration, by relying on paragraph 18(1)(e) of the TMA, which now allows for cancellation of any registration that resulted from an application filed in bad faith.

In the case at issue, Mr. Meng filed the application at issue along with about 20 other applications reproducing famous marks relating to restaurants. Then, after securing actual registration, he contacted the legitimate Chinese business’ partners in Canada, and initiated what can only be described as a shakedown. Basically: you pay me or I sue you in Canada to stop your (legitimate) operations, because I now own a trademark registration for your mark -Ha ha ha [insert cartoon villain evil laugh here].

Well, too bad for this genius extortionist (alleged, should I say, right?), the TMA now allows us to cancel registrations like these, which is exactly what the real owner did, after refusing to pay the ransom, err, I mean the “price” which Mr. Meng asked for.

Given the portfolio of clearly fraudulent applications in his name and a request for 1.5 Millions dollars from this trademark pirate, the court had little difficulty finding bad faith here. Consequently, it ordered cancellation of the registration at issue.

As a result, we (at least) now have a first case of jurisprudence confirming that, yes, in clear cases of crass registration and extortion attempts, the new provisions of the TMA as to bad faith may be used to cancel a registration outright. As to other cases where facts will be less clear-cut, we’ll just have to see, including all eventual cases where pirates are not stupid enough to demand money outright and/or file tens of fraudulent applications in their own names.

For now, let’s just call it progress, and not dwell too much on the fact that this kind of situation now exists partly because the Canadian legislator, in its infinite wisdom, decided to do away with most rules relating to actual use, to file and register trademarks.

Québec Adopts its Charter of the French Language v. 3.0

The province of Québec recently sought to modernize its Charter of the French Language (the “Charter“), a piece of legislation many Quebecers still call “Bill 101” to this day. After partially amending this statute in 2019, the Québec government overhauled it earlier this month, by adopting Bill 96. Through this bill, Québec is expanding the obligations imposed on organizations and businesses, to use French whenever (and however) interacting with residents of the province.

Though I don’t want to get into all the details this morning, it seems worthwhile to provide you with an overview of the kinds of changes this new version of the Charter brings us, so here it is so as to provide you with an idea of what we’re now facing:

  • A general obligation that all organizations serve their clients in French, by providing them with any and all documents and documentation in French, as the case may be;
  • A major change of the rule as to the display of non-French trademarks, by doing away with the exception relating to the common law trademarks. From now on, only common law trademarks composed solely of French words will be tolerated under the Charter, while the rest of trademarks used in Québec will have to be actually registered to pass muster;
  • Reinforcement of the provisions relating to public display of trademarks (e.g. signage) by now requiring that the overall appearance provide substantially more space to French, as compared to other languages such as English (i.e. store fronts should show about twice as much content in French than other languages, not taking into account the trademark);
  • Introduction of a new rule stating that adhesion contracts must now be available in French as a condition of validity for the contracts that are actually entered into by Quebecers, I including but not limited to those for consumers;
  • Lowering from 50 employees to 25, the threshold above which organizations must adopt and apply a francization program;
  • Adoption of stricter rules as to job postings in French and when an organization may require that job applicants have language skills unrelated to French;
  • Addition of a new rule that all written documents and documentation provided by employers to their employees systematically be in French.

It also seems worthwhile to mention that Bill 96 also adds a very American twist to the Charter, by introducing a private right of action. Once in force, this will allow individuals to sue businesses that violate the Charter, so as to obtain either injunctions or (and yes, this is what’s going to have business owners pay attention) damages and punitive damages. As if often the case whenever such rights are introduced in a piece of legislation, class actions will be the first type of proceedings we can expect them to be used for.

I should mention, finally, that most changes outlined above will not come into effect for 3 years, so as to provide businesses with a transition period during which they can bring their organizations in line with the new rules. So, June 1st, 2025 is the deadline you should remember, to update all your practices and your way of doing things in Québec. Mark your calendars!

So, is your organization in-line with all this? Probably not. If it is not, then you now have less than 3 years to do your homework!

Time to Get Out the Garbage: Trademark Office Publishes Draft Practice Notice on Cancelling Bogus Official Marks

Canada’s trademark regime is peculiar in more way than one, including because of the existence of a peculiar type of mark called an “Official mark”. This type of registration is a kind of super mark that CIPO may grant to public authorities, a legal concept that has evolved over time, including to curb the use of this type of mark by organizations , and even business, that do not qualify.

To make a long story short, though “public authorities” aren’t necessarily governmental entities per se, jurisprudence confirmed they must somehow qualify as such, by virtue of being controlled (controllable) by the government and having activities that benefit members of the public. Though the Trademarks Office (the “TMO”) now checks against this definition when issue public marks, it did not always do so and, as a result, our trademark is cluttered with these super marks, quite a few of which are legally invalid.

The problem is made worse by the fact the TMA does not provide a time limit for public marks, so that once granted they remain on the register indefinitely, in principle.

A new section the Trademarks Act (the “TMA”) now seeks to provide some relied as to this issue, by providing us with a section akin to Section 45 through which we may get rid of deadwood on the register, and which allows easily challenging dubious official marks. In essence, the TMA now provides that anyone may challenge a bogus official mark, by flagging it for the TMO, which may then strike it from the register if it was indeed obtain without right by the entity at issue.

Recently, CIPO published a draft practice notice that sets out how submitting such a request to cancel an official mark registration will work in practice. The procedure set forth in the practice notice would require the person objecting to a registered official mark to notify the TMO, pay fees, and provide some sort of evidence that the entity holding the official mark isn’t actually a governmental (or government-related) entity. If, after inquiring, it appears the mark is indeed anomalous, then the TMO may cancel it outright.

So, we’re finally getting a way to scrap bogus official marks that have been cluttering the register for years and years. Not a moment too soon if you ask me, especially given how broad the protection afforded by the TMA to official mark is, by protecting them automatically in any and all classes of products and services, in effect!