The interaction between national borders and the jurisdictional nature of intellectual property rights raises complex issues regarding the infringement of Canadian intellectual property rights through activities with an extraterritorial component. This three-part article series seeks to provide a brief overview of the scope of intellectual property rights held in Canada in relation to export-related activities and the potential for infringement of those rights through such activities. This is Part Two, which addresses trade-marks. Part One addressed patents and industrial designs and Part Three will address copyright.
The Canadian Trade-marks Act (“TMA”) sets out provisions governing the rights of trade-marks holders and expressly addresses exportation rights.
Exclusive Right to Use by Exportation
The TMA grants the owner of a registered trade-mark the exclusive right to the use throughout Canada of the trade-mark in respect of goods and services covered by the registration (s.19). The definition of “use” of a trade-mark includes the exportation from Canada of goods which bear a trade-mark, either directly or on their packaging (s. 4(3)).
Infringement by Exportation
In regards to infringement, the TMA contains specific provisions covering export-related activities. Paragraph 20(1)(b) and (d) of the TMA explicitly deem as infringement:
1) the exportation of goods in association with a trade-mark or trade-name that is confusing with a registered trade-mark; and
2) the exportation of any labels or packaging bearing a trade-mark or trade-name, provided that: (a) the labels and packaging are for the purpose of sale, distribution or advertisement of goods or services; (b) the use of the labels and packaging in association with the goods or services would be confusing with a registered trade-mark; and (c) the exporter knew or ought to have known that the labels and packaging would be intended to be associated with goods or services that were not those of the registered trade-mark owner.
The assessment of trade-mark infringement is centered around the notion of “confusion”, where the Canadian courts will consider several factors set out in section 6(5) of the TMA and will assess the specific circumstances at hand to determine whether or not the export of goods bearing a trade-mark would be considered to be confusing with the registered mark, such that the average consumer would likely believe the goods bearing the trade-mark come from, or are somehow associated with, the owner of the registered mark. The nature of the goods is one of the factors considered, but the goods at issue need not be identical to the goods covered by the registered mark in order for confusion to be found. Accordingly, the export of different goods or even component parts of related goods that may be assembled abroad may still be considered infringing in circumstances where there is a likelihood of confusion.
The TMA also provides for criminal offences related to the infringement provisions noted above, the punishment for which can include a fine up to $1,000,000 and/or imprisonment for a term of up to 5 years. Paragraphs 51.01(2) and (4) of the TMA deem it an offence for anyone to knowingly export for commercial purposes goods, or their labels or packaging, that bear marks that are identical, or near identical with the same essential aspects, to a registered mark without the registered owner’s consent and in a manner would be contrary to an owner’s rights under sections 19 or 20.
Prohibition Against Exportation of Counterfeit Products
The TMA contains provisions governing Canada’s border enforcement regime intended to address imports and exports of counterfeit products.
Section 51.03 of the TMA provides a general prohibition against the unauthorized exportation of goods which bear a mark, whether directly or on their labels or packaging, that is identical to or that cannot be distinguished in essential aspects from a registered trade-mark. However, the prohibition does not apply where: (i) consent of the owner of the trade-mark has been given; (ii) the sale or distribution of the goods (or labels/packaging) is otherwise allowed under the TMA; (iii) the exportation is for personal use; or (iv) the goods are being imported/exported through Canada merely as a “transshipment” between places outside of Canada.
Section 51.04 allows a registered trade-mark owner to file a Request for Assistance (“RFA”) requesting the assistance of the Canadian Border Services Agency (“CBSA”) in pursuing remedies under the TMA with respect to exported goods in contravention of section 51.03. The RFA can include, amongst other things, details about the rights holder and a list of registered trade-marks, the name and description of authentic goods, a list of trusted importers/exporters, and a list of known illegitimate importers/exporters.
Once the RFA is approved, the TMA provides CBSA officers with ex officio powers to detain suspicious goods attempting to be exported from Canada and to notify the trade-mark owner. The trade-mark owner will then have the option of pursuing remedies against the exporter. A more detailed review of the Canadian border enforcement regime for counterfeit goods is available here.