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CHARITIES LOSE INHERENT RIGHT TO
OFFICIAL MARK REGISTRATIONS
By Mark J. Wong
and Terrance S. Carter, Trade-mark Agent
A. INTRODUCTION
Until recently, charities had been able to obtain “Official
Mark” registrations for their trade-marks under Section
9 of the Trade-marks Act in addition to regular trade-mark
registrations. However, as a result of two recent decisions
from the Federal Court of Canada, the ability of charities
to obtain Official Mark status has been jeopardized, which
will make it difficult for charities in the future to fully
protect their intellectual property as they have been able
to in the past.
B. EXPLANATION OF SECTION 9
Section 9 Official Marks are provided for under section 9(1)(n)(iii)
of the Trade-marks Act (the “Act”). The registered
owner of an Official Mark is given extraordinary protection
and can prohibit any person from adopting a trade-mark that
is likely to be mistaken for any mark that is adopted and
used by any “public authority” in Canada as an Official
Mark for wares and services in respect of which the Registrar
has, at the request of the public authority, given public
notice of its adoption and use.
Upon the Registrar satisfying itself that the applicant
is a “public authority” and that the applicant has
adopted the mark for wares and services, the Registrar will
then proceed to provide public notice of the mark in the Trade-marks
Journal. After public notice of the mark has been given, no
one else is allowed to adopt the mark in relation to any wares
or services without first obtaining consent from the registered
owner.
In comparison to a regular trade-mark, it is much easier
to obtain a Section 9 Official Mark provided that the applicant
qualifies as a “public authority”. In an application
for a regular trade-mark, the applicant must have an official
search and an official examination performed by the Canadian
Intellectual Property Office (“CIPO”). However,
a Section 9 Official Mark only requires the Registrar to be
satisfied that the applicant is a “public authority”,
and that the applicant has adopted the mark for wares and
services.
Notwithstanding the simplified examination process in order
to secure Section 9 Official Marks, there are significant
benefits available to Section 9 Official Marks that are not
available to regular trade-marks. Specifically, an Official
Mark can be descriptive as well as confusing with another
mark. For example, a public authority could secure an Official
Mark that is descriptive of the products and services that
it provides, such as “The Camera Store”. This Mark
would not be available to a regular trade-mark applicant,
as the Mark would be primarily descriptive of the applicant’s
wares and services.
In addition, as the law stands today, it is difficult for
a Section 9 Official Mark to be revoked by an action through
the courts, since there does not appear to be anything in
the Act providing for revocation of an Section 9 Official
Mark once public notice of the mark has been given. There
is also nothing in the Act that outlines a procedure for an
interested third party to challenge the public notice of a
Section 9 Official Mark. The only recourse that a third party
has is to challenge the decision of the Registrar by way of
judicial review pursuant to section 18.1(1) of the Federal
Court Act quashing the decision of the Registrar to give public
notice. Furthermore, the protection granted to Official Marks
is broader than the protection that is granted under a regular
trade-mark registration because it prohibits others from using
the Official Mark for any wares and services and not just
for the limited wares and services used by the public authority.
Due to the simplified procedure in securing Section 9 Official
Marks and the broad powers that are provided to owners of
Section 9 Official Marks, there has been considerable litigation
to determine who qualifies as a “public authority”,
thereby being entitled to register a Section 9 Official Mark.
The remainder of this Charity Law Bulletin analyzes two decisions
from the Federal Court, namely, The Ontario Association of
Architects v. Association of Architectural Technologists of
Ontario (unreported) (the “Architects Case”) as
well as Canadian Jewish Congress v. Chosen People Ministries
Inc. (also unreported) (the “Chosen People Case”).
C. RECENT DECISIONS CONCERNING THE DEFINITION
OF “PUBLIC AUTHORITY”
In December 1997, Chosen People Ministries, Inc. (“Chosen
People Ministries”) applied to CIPO for a Section 9 Official
Mark pursuant to Section 9 of the Trade-marks Act of Canada.
The purpose of that application was to obtain protection for
its logo, a stylized version of a menorah, a seven branched
religious candle holder. On November 3rd, 1999, CIPO granted
a Section 9 Official Mark to Chosen People Ministries for
its logo.
On January 4th, 2000, the Canadian Jewish Congress (“CJC”)
launched an application in the Federal Court of Canada questioning
the entitlement of Chosen People Ministries to receive a Section
9 Official Mark, as well as the propriety of the decision
of CIPO in granting a Section 9 Official Mark to Chosen People
Ministries. As such, Chosen People Ministries was compelled
to defend its logo at the Federal Court Trial Division. The
Federal Trial Court released its ruling in the Chosen People
Case on May 27th, 2002. A copy of the ruling can be obtained
at http://decisions.fct-cf.gc.ca at docket number T-3-00.
In his ruling in the Chosen People Case, Justice Blais of
the Federal Trial Court has cast doubt on the entitlement
of charities to obtain Section 9 Official Marks. Justice Blais
stated that, in determining whether an entity is a “public
authority”, a three prong test must be met. The entity
must establish that it is a body that is under a duty to the
public, must be subject to a significant degree of governmental
control and must be required to dedicate any profit earned
for the benefit of the public and not for private benefit.
In his decision, Justice Blais concluded that Chosen People
Ministries did not meet the test of “public authority”
and as a result was not entitled to receive a Section 9 Official
Mark for its logo.
Justice Blais stated that:
“the fact that Chosen People Ministries was incorporated
as a non profit corporation with charitable objects, had obtained
tax exempt status and the ability to issue charitable receipts
to donors, and also the fact that as a foreign charity operating
in Ontario, Chosen People Ministries could be asked to provide
its accounts, financial and corporate information to the Public
Guardian and Trustee of Ontario under the Charities Accounting
Act (Ontario) was not sufficient to conclude that Chosen People
Ministries was a public authority. All charitable organizations
have to comply with regulations in the United States and Ontario
and, [even if] they comply with the regulations in place,
the charitable organizations are not subject to “significant”
government control”.
In his submission, Chosen People Ministries argued that it
met the test for “public authority” as established
in the Canadian Olympic Association v. Registrar of Trade-marks
case (“COA Case”). In that case, the Court found
that the COA was subject to a significant degree of government
control. The court held that in the event that the COA surrendered
its charter, its assets were to be disposed of by the Government
of Canada in co-operation with the International Olympic Committee.
The court also noted that a substantial portion of the COA’s
funding came from the federal government with the disposition
of that funding being monitored by the government. In addition,
the federal government had been able to prevail upon the COA
to not participate in the 1980 Olympic Games. Finally, there
was a close relationship between the COA, the Directorate
of Fitness and Amateur Sport and Sport Canada.
In the Chosen People Case, Justice Blais held that Chosen
People Ministries was not subject to any similar or analogous
governmental control. Specifically, Justice Blais stated that:
“CPM is not subject to any similar or analogous government
control. CPM's property is not to be disposed of at the direction
of the government. The CPM is not funded by the Government
of Canada or the United States and [that Chosen People Ministries]
is in no way subject to monitoring by the government in any
shape or form.”
Justice Blais further held that:
“To the contrary, as suggested by the CJC counsel, the
Government of Canada cannot intervene in any way with churches
or charitable organizations like CPM [in how they] conduct
their affairs.”
As a result of the decision of Justice Blais, there is now
doubt about the availability of Section 9 Official Marks for
charities. Some legal commentators have interpreted Justice
Blais’ decision as judicial authority for the proposition
that charitable entities do not meet the test for “public
authority” and therefore are not entitled to Section
9 Official Mark registrations. Whether these commentators
are correct or not, it is clear that Justice Blais’ decision
has significantly raised the bar for charities to be able
to obtain Section 9 Official Marks.
On the same day as the decision in the Chosen People Case,
i.e.May 28th, 2002, the Federal Court of Appeal released its
decision in the Architects Case.
The Association of Architectural Technologists of Ontario
(“AATO”), an Ontario not-for-profit corporation
without share capital, applied and received public notice
of the Official Marks Architectural
Technician, Architecte-technicien, Architectural Technologist,
Architecte-technologue. The decision of the Registrar of Trade-marks
to provide public notice of these Official Marks was challenged
by the Ontario Association of Architects (“OAA”)
at the Federal Court of Canada.
Once again, the issue to be decided by the Federal Court
was whether or not AATO was a “public authority”,
thereby being entitled to receive Section 9 Official Marks.
The Federal Trial Court has decided that AATO was a public
authority and therefore was entitled to request that public
notice be given of the adoption and use of its Section 9 Official
Mark. The Trial Court held that since AATO was a creature
of statute, subject to the control of the legislature that
created it, and that AATO’s enabling legislation was
capable of being amended by the government at any time it
met the test of governmental control.
In ruling that the ATTO served a “public benefit”,
the court held that “although the AATO undoubtedly serves
the interests of its members, it also owes a duty “to
the public in regulating its profession” by prescribing
and enforcing ethical and competency standards for its members.”
The Trial Court also noted that “the AATO’s revenue
is to be used to further its regulatory functions and not
for the benefit of its members. Hence, the [Trial Court held
that] AATO’s statutory objects and powers that it exercised
over its members sufficed to impress it with duties owed to
the public and to endow it with a public function. Accordingly,
its activities were for the public benefit.”
The OAA appealed the decision of the Federal Trial Court
to the Federal Court of Appeal. In giving its decision, the
Federal Court of Appeal, in deciding whether or not AATO was
a “public authority”, modified the three prong test
adopted by Justice Blais in Chosen People Ministries. The
Federal Court of Appeal amended the three prong test into
a two prong test requiring that an entity establish that it
is subject to (1) a significant degree of governmental control
exercised by the appropriate governmental authority; and (2)
the activities of the body must benefit the public. The Federal
Court of Appeal, in deciding against AATO, stated that AATO
was not a “public authority” and therefore it was
not entitled to an Official Mark registration.
Justice Evans of the Federal Court of Appeal disagreed with
the Trial Court’s decision in deciding that AATO was
a “public authority”. Justice Evans held that the
trial judge had erred when he concluded that “AATO’s
statutory origin is in itself sufficient to make it a public
authority”. Justice Evans disagreed with the Trial Court
in finding that AATO was subject to governmental control simply
because it is a “statutory body with no delegated power
to alter its corporate powers, objects or functions without
an amendment to its statute.” Justice Evans stated that
governmental control required some ongoing government supervision
of the activities of the body claiming to be a “public
authority” for the purpose of subparagraph 9(1)(n)(iii).
In his decision, Justice Evans provided an example concerning
what would constitute governmental control. Justice Evans
relied upon the Architects Act as an example of Ontario legislation
governing a self regulatory professional body where there
was evidence of substantial governmental control. Pursuant
to the Architects Act, the Minister has the authority to:
(a) review the activities of the OAA’s Council;
(b) request control to undertake activities that, in the Minister’s
opinion, are necessary and desirable for implementing the
intent of the Architects Act; and
(c) advise the OAA Council on the implementation of the statutory
scheme.
In addition, the Council’s regulation making power
is exercisable with the approval of the Lieutenant Governor
in Council. Justice Evans further stated that similar provisions
are contained in the Regulated Health Professions Act and
the legislation governing the regulation of the various health
disciplines.
In relation to the second branch of the test, without going
into a detailed analysis, Justice Evans upheld the decision
of the trial judge in deciding that AATO met the public benefit
portion of the “public authority” test.
D. THE FUTURE FOR SECTION 9 OFFICIAL MARKS
As a result of these two decisions released on the same date,
there is now uncertainty concerning the availability of Section
9 Official Marks to charitable organizations. Not only do
the decisions raise the possibility that charitable organizations
will no longer be able to get Section 9 Official Marks, but
more importantly, the decisions raise the possibility that
charities might possibly lose Section 9 Official Marks that
they currently hold, if challenged.
On October 2nd, 2002, as a result of these two decisions,
CIPO published a new Practice Notice in deciding whether a
particular entity qualifies as a “public authority”.
In deciding whether or not a body is a “public authority”,
the Registrar will now use the two part test affirmed in the
Architects Case. The Registrar must find that “(a) a
significant degree of control must be exercised by the appropriate
government over the activities of the body; and [that] (b)
the activities of the body must benefit the public.”
The Registrar, in applying the above test, will adopt the
interpretation found in the Architects Case, as well as in
the Chosen People Case.
In determining the existence of significant degree of governmental
control, the Registrar will be looking for evidence of ongoing
government supervision of the activities of the organization
and that the government is enabled, directly or through its
nominees, to exercise a degree of ongoing influence in the
organization’s governance and decision making. Reference
should be made to the Practice Notice for a full description
of the consideration.
The second part of the test is that the body must demonstrate
that its activities benefit the public. The Practice Notice
adopted by the Registrar will consider the objects, duties
and powers, including the distribution of the bodies’
assets.
The effect of the decisions in the Chosen People Case and the
Architect Case, in conjunction with the new Practice Notice has
consistently heightened the bar for charitable organizations in
obtaining Section 9 Official Marks. These decisions will have
the impact of making it more difficult for charitable organizations
to qualify as a “public authority” in order to obtain
Section 9 Official Marks in the future, although it has yet to
be seen how the Registrar will respond to submissions concerning
how a charity can meet the two part test in the Architect Case.
As a result of these recent changes that have occurred to Section
9 Official Marks, charities currently holding Section 9 Official
Marks should ensure that they have parallel registered trade-marks
for all Section 9 Official Marks they currently hold, since there
are distinctive benefits available through registered trade-marks
not necessarily associated with Section 9 Official Marks. Furthermore,
the need for charitable organizations to proceed with separate
trade-mark applications has become all the more important as a
result of the potential threat to the continued viability to existing
Section 9 Official Marks.
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