Canada’s latest trade deal is set to expand the protection of geographical indications to a wide array of agricultural products.

On October 30, 2016, Canada and the European Union signed the Comprehensive Economic and Trade Agreement (“CETA”). A day later, the Government of Canada tabled Bill C-30 (the “Bill”) for the purpose of implementing CETA into the country’s legislative landscape. One of the primary operative effects of CETA, as a trade agreement, is that it will eliminate 95% of all existing tariffs applied to goods traded between the two jurisdictions. Apart from the direct economic impact however, CETA also has important intellectual property implications for producers of covered goods.

Under Canada’s current legislation, protection of geographical indications extends to only wine and spirits. For example, covered products such as “Cognac” and “Champagne” can only be labelled as such if they originate from those geographic regions. Specifically, the Canadian Trade-marks Act (the “Act”) currently defines Geographical Indications (“GI”) as an indication (word or symbol) 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 the wine or spirit is essentially attributable to its geographical origin.

A GI designation confers a right upon a party to use the indication and to prevent its use by a third party whose product does not conform to the applicable standards. In accordance with CETA provisions, the Bill introduces amendments to the Act which expand GI protections beyond wines and spirits to agricultural foods and products, which covers a variety of products such as milk, olives and beer. Similarly, under the CETA, Canadian producers of agricultural foods and products such as maple syrup will have access to equivalent protections in the European Union. Consumers in Canada may also welcome the clarity it provides in respect of ensuring that they are obtaining a genuine product from its place of origin and made in accordance with the often detailed rules of the “protected designation of origin” and “protected geographical indication” system that has long been in place in the European Union.

New GI Rights and Remedies

Once the Act is amended, agricultural foods and products rights holders will have access to a variety of rights and remedies under the Act, specifically:

  • Commercial adoption or use of a protected GI is prohibited (s. 11.15(1)-(3)).
  • No person may use a protected GI or its translation for comparative advertising purposes on packaging or labels, though they can do so on other advertisements (s. 11.16(3)-(4)).
  • The listing of a GI will provide grounds for a trade-mark opposition in respect of any agricultural product or food that (a) adopts the name of the GI in whole or in part; (b) belongs to the same product category as the GI; and (c) does not originate in the same territory as the GI (s. 12(1)(h.1)).
  • The existence of a similar trade-mark registration does not prevent a party from using a GI (s. 20(2)).
  • Covered products may not be exported or imported, if the product itself, or its label or packaging, bears a protected GI and the product does not originate from the territory indicated, or if it does originate from the territory indicated, was not produced or manufactured in accordance with the law applicable to that territory. (s. 51.03(2.2)).

The Phasing in of New GIs – A Two-Stream Process

The GI protections under the Act will be accorded in two main phases. Schedule 6 of the Bill contains pre-cleared GIs that will be entered by the Register of Trade-marks upon the coming into force of the Act, along with their translations (Bill, s. 115). Further s. 11.22 of the Act will shelter them from future attack based on disuse, use as a customary name, or confusion. These provisions appear to be designed to deter domestic producers from ambushing European or Korean GIs which Canada has agreed to protect pursuant to the CETA and the Canada-Korea Free Trade Agreement. Section 116 of the Bill creates a complementary process where new GIs can be fast-tracked and sheltered in future by being added to Annex 20-A of the CETA.In circumstances where fast-tracking is unavailable, new GIs will have to be approved by a responsible Minister of the Canadian government and then exposed to an objection process (ss. 11.12-11.13), as well as the prospect of subsequent expungement based on disuse, use as a customary name, or confusion (s. 11.21). Presumably, this path will be taken for non-European Union GIs such as “Darjeeling” or “Rooibos” for tea, or “Basmati rice”.

As part of the Registrar of Trade-mark’s supervision of a list of geographical indications, in the case of agricultural foods and products, translations of those indications must also be included. Moreover, the window period for filing a statement of objection and counter statement has been reduced from three to two months for each. It appears that the procedure for objections may be spelled out via regulations to the Act (s. 11.13(5)).

An objector will be able to draw on the following grounds of attack:

  • The proposed GI does not function as a GI at the time the Minister proposes to add it to the list, namely that (a) it does not originate in the listed territory, or (b) a quality, reputation or other characteristic of the product or food is not essentially attributable to its geographical origin. This may lead to interesting expert evidence on terroir in future cases.
  • The proposed GI or its translation is identical to a term customary in common language in Canada.
  • The proposed GI is not protected under the law of the country of origin (with a carve-out for Canadian GIs).
  • The proposed GI or its translation is confusing with a registered, applied-for, or common law trade-mark at the time the Minister proposes to add it to the list.
  • The proposed translation is not a faithful one. (s. 11.13(2)-(2.1))
  • A number of factors must be when determining whether an indication is confusing with a trade-mark. While the Registrar or the Federal Court must have regard to all the surrounding circumstances, they are specifically instructed to consider a number of factors lightly adapted from the mainstream test for confusion under s. 6(5) of the Act:
  • The length of time that the indication has been used to identify the product with which it is associated as originating in the territory, and the extent to which it has become known;
  • The degree of resemblance between the indication and the trade-mark, including in appearance or sound or in the ideas suggested by them; and
  • With respect to the trade-mark, its inherent distinctiveness and the extent to which it has become known, the length of time of its use and the nature of the goods, services or business associated with it. (s. 11.11(3)-(4))

Exceptions to the New Rules

The Bill contemplates exceptions to the GI rules by protecting existing Canadian trade-mark rights and providing relief for common Canadian linguistic usages. The new GI rules are not applicable to indications in the following scenarios:

  1. Those indications that are identical to terms customary in the common language in Canada as the common name for an agricultural product or food. Examples of such common names include “Valencia Orange”, “Parmesan”, “Black Forest Ham” and “St. George Cheese”.
  2. Producers of certain types of cheese who used the indications “Asiago”, “Feta”, or “Gorgonzola” prior to October 18, 2013 may continue to do so without the application of GI rules. However, future users of these terms must do so in conjunction with qualifying terms such as “kind”, “type”, “style” or “imitation”.
  3. Indications for “Jambon de Bayonne” and “Beaufort” if their use has been maintained for at least 10 years prior to October 18, 2013, and indications for “Nurnberger Bratwurste” if their use has been maintained for at least 5 years prior. These exceptions, however, do not cover customary usage of protected Canada-Korea GIs including “Korean Red Ginseng”, “Icheon Rice” and “GoryeoHongsam”.
  4. Those indications that are confusing with respect to a registered trade-mark in Canada, a Canadian trade-mark previously used but as yet not abandoned, or one in respect of which an application has been filed with the appropriate authorities and remains pending (i.e. use of both the indication and the trade-mark in the same area would likely lead to the inference that the product associated with the indication originates from the same source as goods associated with the trade-mark). However, importantly, the use or application must be in “good faith” (s. 11.2(3)). Bad faith appears to require that “the person who filed [or used] the application for registration of the trade-mark did so with knowledge that the trade-mark was in whole or in part a protected geographical indication” (s. 11.19(2)). This exception to the GI rules is significant as it protects existing good faith trade-marks in Canada.

Federal Court Challenges

The Bill also provides any interested person the opportunity to challenge the presence of an indication on the Registrar’s List of protected GIs. The Federal Court is given exclusive jurisdiction to summarily hear an application for such a challenge and to order the Registrar to remove an indication or translation from the Registrar’s List on any valid grounds. This is a new grant of jurisdiction to the Federal Court. The current version of the Act only provides for removal of an indication from the List at the discretion of a Minister as designated. The amendments also provide greater power to the Registrar to reject a statement of objection at its own discretion if it considers that the statement of objection does not raise a substantial issue for decision.

Bill C-30 will also bring about changes to Canada’s Patent Act, which you can read about in our snIP/ITs post: CETA Implementation in Canada: Bill C-30 Brings Significant Changes to the Canadian Patent System.