Canadian Trademark Law 2022: Year In Review

• Law Firm: Smart & Biggar
• Subject Matter: Intellectual Property, Trademark
• Author: Ms Nora Labbancz, Reagan Seidler, Philip Lapin and Alexandra Johnson Dingee
• Published date: 02 February 2023

The proverbial brand owner's guidebook became a little bigger in 2022. Developments in practice opened new avenues for securing and enforcing trademark rights over the past year, including an "accelerated" path to trademark registration and additional guidance for invalidating bad faith registrations.

At the same time, notable complications emerged with the adoption of Quebec's new French language law, Bill 96, and its significant amendments to Québec's Charter of the French Language. New requirements imposed by Bill 96 are on the horizon, adding a layer of complexity to the selection, advertising, and use of English (and other non-French) trademarks in Canada.

The following article highlights some of the most important new laws, cases, and practice directions from 2022 that brand owners should be aware of when doing business in Canada.

Table of contents

Notable Canadian trademark cases

1. Rightful owners can win fights against stolen trademarks
2. The importance of controlling your licensees
3. Obvious knock-off products are just as illegal as deceptive ones
4. Place names are often not registrable trademarks

Key developments in Canadian trademark practice

1. Pilot project launched to reduce backlog for pending applications
2. New options for challenging "official marks"

Legislative developments

• Quebec's new Bill 96 imposed additional French-language requirements for trademarks
  
  

Notable Canadian trademark cases

1. Rightful owners winning fight against stolen trademarks

When "bad faith" was added as a stand-alone basis to invalidate registered trademarks in 2019, many wondered how the term "bad faith" would be defined under the case law.

With 2022 delivering the first two successful "bad faith" cases, we now have some guidance as to what factors can constitute "bad faith."

The first case involved a trademark troll who registered the logo of a popular foreign Chinese restaurant chain. One week after obtaining the registration, the troll approached affiliates of the rightful owners with demands which would come to include $1.5 million to obtain the registration. When the rightful owners refused, the unscrupulous registrant advertised the mark for sale online.

In Beijing Judian Restaurant Co Ltd v Meng, 2022 FC 743, Justice Furlanetto expunged the wrongfully-registered mark, finding it was filed in bad faith. In particular, the court found the registrant lacked any "legitimate commercial purpose" for registering the mark, and instead did so solely for the purpose of reselling it. The rightful owner was awarded costs to partly recompense the cost of the expungement proceeding.

The second bad faith case involved a licensee (technically a sub-licensee) who registered the mark of the licensor.

The rightful owner of the mark was a U.S. company, Blossman Gas, which oversaw a network of independent propane marketers and conversion centers called ALLIANCE AUTOGAS. Blossman had been using various ALLIANCE AUTOGAS trademarks in the US since at least 2009, and licensing dealers in Canada to use the marks since at least 2012.

The wrongdoer, AAP, was a sublicensee of Blossman based in the province of Québec. While under contract as a sublicensee, AAP applied to register the following design that it was given permission to use:

The trademark application was made without AAP alerting either its direct licensor or Blossman itself.

Upon expiration of its sublicense agreement, AAP continued to do business using various ALLIANCE AUTOGAS trademarks, including the logo noted above. Blossman sued. The lawsuit argued that AAP obtained its registration in bad faith, and that AAP was passing off its services as those of Blossman by using the mark.

The court agreed. It found the mark was registered in bad faith, principally as:

• AAP was a sublicensee at the time it applied to register the mark;
• The terms of the agreement to which AAP was bound identified...