Bill C-47 grants Olympic Trademarks Unprecedented Protections

August, 2007

With the passing of Bill C-47 known as the Olympic and Paralympic Marks Act (the “Act”), owners and licensees of olympic and paralympic trademarks (the “Owners and Licensees”) have gained unprecedented powers to protect their marks.  The government appears to have been persuaded that the Trade-marks Act[1] and the common-law are inadequate to empower Owners and Licensees to quickly respond to the misuse of their marks.  Instead, it is the intention that the Act will provide Owners and Licensees with the necessary power to rapidly stop the misuse of their marks from now until December 31, 2010.

Definitions

Before we begin, it is important to set out a couple of key definitions in the Act.

The Act defines “Olympic or Paralympic mark” to mean any mark set out in Schedule 1 or 2 of the Act, except for any mark which has expired under Schedule 2.

Schedule 1 of the Act lists certain words, which will be protected indefinitely under the Act, such as “Canadian Olympic Committee”, “Faster, Higher, Stronger”, “Olympia”, and “Olympic Games”.

Schedule 2 lists certain words which will only be protected up until a certain date, that is December 31, 2010 in the case of the trademarks for the Vancouver 2010 Olympic Games, such as “Whistler Games”, “Vancouver 2010”, “Canada’s Games”, and “Sea to Sky Games”.  Although the Vancouver Games end on March 21, 2010, the marks listed in Schedule 2 will be protected under the Act until December 31, 2010.

The Act defines “organizing committee” as any organization that is recognized by the Canadian Olympic Committee and a city in Canada elected to host an Olympic Games or Paralympic Games as being responsible for the planning, organizing, financing and staging of those Games.

Prohibitions under the Act

The Act contains two prohibitions at section 3 and section 4 respectively.

Section 3 – Prohibition against Adoption and Use

Section 3 states that:

“No person shall adopt or use in connection with a business, as a trade-mark or otherwise, an Olympic or Paralympic mark or a mark that so nearly resembles an Olympic or Paralympic mark as to be likely to be mistaken for it”.

Further, the Act requires that the Trade-marks Act be amended, so that the Trademarks Examiner shall refuse to register any trademark which is prohibited by section 3 of the Act.  Effectively, the Act changes the grounds of registrability for a trademark application under the Trade-marks Act.

The Act does contain certain exceptions to the prohibition against the use and adoption of Olympic or Paralympic marks.  Some of the most notably exceptions are, generally, for persons who have obtained the consent of an organizing committee or for trademarks which the owner or licensee has used before March 2, 2007.

It must also be noted that the wording for section 3 is very similar to the wording in section 9(1)(n)(iii) of the Trade-marks Act, which states:

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

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

In order to assess whether section 9(1)(n)(iii) has been infringed, the courts use a test of resemblance and not one of confusion.  It has been held that when applying the test of resemblance, the absence or similarity of services or wares between the parties is irrelevant.  As section 2(2) of the Act says that, unless the context otherwise requires, words and expressions used in the Act have the same meaning as in the Trade-marks Act, jurisprudence under the Trade-marks Act concerning section 9(1)(n)(iii) may prove instructive with respect to section 3 of the Act.

Section 4 – Prohibition against Misleading Promotion

Section 4 of the Act states that:

“No person shall, during any period prescribed by the regulation, in association with a trade-mark or other mark, promote or otherwise direct public attention to their business, wares or services in a manner that misleads or is likely to mislead the public into believing that:

(a)        the person’s business, wares or services are approved, authorized or endorsed by an organizing committee, the Canadian Olympic Committee or the Canadian Paralympic Committee; or

(b)        a business association exists between the person’s business and the Olympic games, the Paralympic Games, an organizing committee, the Canadian Olympic Committee or the Canadian Paralympic Committee.

As section 4 appears to prohibit the use of a trademark or other mark to promote or direct public attention to a business, etc, in a manner that misleads or is likely to mislead the public into believing certain associations, I found it interesting that a registered trademark, which qualified for an exemption under section 3, may nevertheless be prohibited under section 4.  Further, I am curious to see how a court will interpret and determine whether the “public” has been mislead or is likely to be mislead into believing something.   

Extraordinary Power: Injunctions

Most of the hand-wringing in intellectual property circles has been over section 6 in the Act.  In an effort to provide the Owners and Licensees with the ability to quickly enforce their rights under the Act, if the Owners and Licensees begin an interim or interlocutory injunction against a party, who may be breaching the Act, section 6 relives the Owners and Licensees of the requirement to prove that they will suffer irreparable harm.

In order to prove irreparable harm, one must traditionally show that the injured party could not be fully compensated by monetary damages.  It is possible that, in most cases, where a person is selling inexpensive goods contrary to the rights of the Owners and Licensee, that any damage could be properly quantified and that such quantified amount could adequately compensate the injured party.

It is important to note that no other party under the Trade-marks Act has such a privilege.  It is only by virtue of being a mark listed in the Schedules to the Act, that the owner of such mark is granted this tremendous power to enforce its rights against alleged infringers.

Summary

The Act gives the Owners and Licensees of Olympic or Paralympic marks three important advantages: (i) a prohibition against the use or adoption of marks that nearly resemble any Olympic or Paralympic marks as to be likely mistaken for them; (ii) a prohibition against the promotion or directing of public attention to a business/wares or services in a manner that misleads or is likely to mislead the public into believing that there is some endorsement or association, etc, between the organizing committee, etc, and the business and/or its wares and services; and (iii) in enforcing their rights under the Act through an interim or interlocutory injunction, the Owners and Licensees will not have to prove irreparable harm.

The enactment of the Act appears to communicate that the protection granted generally under the Trade-marks Act and against passing off under the Trade-marks Act and the common-law are insufficient to protect Olympic or Paralympic marks.  Therefore, it was necessary to pass the Act, in order to satisfactorily protect the rights of the Owners and Licensees.  Meanwhile, the owners and licensees of non-Olympic and Paralympic marks will have to be satisfied with the ordinary protections afforded to their marks under the common-law and the Trade-marks Act.  The Act provides a powerful new weapon for the Owners and Licensees of Olympic or Paralympic marks.

Discussion

Why would Olympic or Paralympic marks receive special rights under their own act of Parliament?  Of course, the first argument is that as the olympic and paralympic games only take place one time over approximately five weeks, from February 12 to March 21, 2010, that it is important that the Owners and Licensees be able to enforce their rights swiftly and effectively.

However, if the concern that the Owners and Licensees have is that trademarks, which are confusing with Olympic or Paralympic marks, may pass by the Examiner of Trademarks and be registered, then the Owners and Licensees should take note that they have the ability just like any other person to oppose any trademark application before it becomes registered.  Further, even if they do not have a registered trademark, the Owners and Licensees would be able to oppose an application on several other grounds, such as the applicant was not entitled to the trademark, the trademark is not distinctive, etc.  At common-law and under statute, the Owners and Licensees also have the right to challenge the use of any mark as passing-off.  Such rights could be enforced through a normal application to the court or through the instigation of an injunction.

The Owners and Licensees would most likely counter argue that the nature of the olympic and paralympic games are such that the volume of actions and oppositions they would have to start would be unwieldy.  The current Trade-marks Act simply does not contemplate trademarks, whose most useful and valuable life would be during a single 5-week period.  Further, that any action to prove passing-off would basically take too long to work its way through the courts in light of the 5-week olympic and paralympic event.  Further, that if the Owners and Licensees wished to stop any passing-off during and around the 5-week event, it could only act effectively through an injunction.  However, as an interim injunction requires that irreparable harm be proven, it would in most cases be impossible to establish against any person merely selling inexpensive merchandise branded with a mark resembling or identical to any Olympic or Paralympic marks.

In response, one could state that anytime one has a high-value brand, it will require constantly policing to ensure that others are not taking advantage of the goodwill associated with such high-value brand.  Nevertheless, Canadian law recognizes that no mark should be afforded any more rights than any other mark.  Rather, that all marks are treated equally under Canadian law in accordance with their status as registered or unregistered trademarks.  Further, that the remedy of an injunction is a powerful tool to use against any person operating in the marketplace and should only be granted in those rare circumstances, where it is clear that the aggrieved would suffer irreparable harm incapable of compensation by any monetary amount.

The obvious winner in this debate was the Owners and Licensees of Olympic or Paralympic marks.  They were able to successfully lobby the government that the regime for protection of trademarks under the Trade-marks Act and under statute and the common-law is ill-suited to protect Olympic or Paralympic marks, especially during the 5-week period of the events.

In light of the precedent established, it will be interesting to see where future governments draw the line at enacting public statutes for the protection of the trademarks of private companies.  How will a government respond the next time a world exposition comes to Canada or Major League Baseball decides to hold its all-star game in Toronto?

Conclusion

The Olympic or Paralympic marks listed in Schedules 1 and 2 of the Act are stronger and more hardy than ordinary registered and unregistered trademarks.  Any person infringing the rights of the Owners and Licensees under the Act, the Trade-marks Act, any statute, or at common-law can expect to be swiftly rebuked by way of injunction even if no irreparable harm would result from such infringement.  The message to merchants is clear: (i) ensure that the marks used with goods and services do not bear any resemblance to the Olympic or Paralympic marks; and (ii) do not promote or otherwise direct public attention to your business/wares and services in a manner which misleads the public into believing your business/wares and services have some kind of association with the olympic or paralympic games or are endorsed/authorized by an organizing committee, etc.

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Ryan K. Smith is a lawyer and trade-mark agent at Feltmate Delibato Heagle LLP. He specializes in corporate and commercial law with expertise in intellectual property matters including trade-marks, copyrights, privacy, information technology, and confidential information.  You can reach Ryan at rsmith@fdhlawyers.com and (905) 287-2215.

 

[1] R.S.C. 1985, c. T-13.