An Ottawa distillery fell victim to the “nuclear weapon” of Canada’s Trade-marks Act after the provincial government asked it to change its logo, says Toronto intellectual property lawyer John Simpson.
According to a National Poststory, Ontario’s Ministry of Transportation asked the owners of the North of 7 Distillery to stop using their design, which was modelled on the traditional road sign markers on the King’s Highway 7 route across southern Ontario.
In a statement to the paper, the ministry said the logo was a “prohibited mark” under s.9 of the Act, which deals with marks owned by government or public authorities.
“A mark on liquor bottles consisting of, or so nearly resembling as to be likely to be mistaken for, the Provincial Route Marker Shield could lead to the belief that the products have received endorsement or are produced and sold under governmental patronage, approval and authority,” a spokesperson wrote.
Simpson, principal of IP and new media law boutique Shift Law, says lawyers have nicknamed the prohibited marks provisions the law’s “nuclear weapon” because of the power it gives to governmental bodies to prevent the use of crests, flags or other emblems associated with various national, provincial or civic organizations.
“They’re not like any other type of trademark,” Simpson tells AdvocateDaily.com. “They don’t have to be in continual use, they can’t be invalidated for non-use, and it doesn’t matter if there’s no likelihood of confusion. All the public authority has to do is say that it belongs to them, and it can’t be used anymore.”
Simpson says there are mechanisms for gaining consent to use a prohibited mark, but that the owners have virtually unlimited discretion to withhold it.
“In many cases, you will get consent, but you can only use the mark at their pleasure,” he says.
In the Post story, distillery co-owner Greg Lipin complained that other businesses continued to use similar logos to theirs.
“A bunch of people have sent me examples of multiple businesses in Ontario that use almost the exact likeness of the sign, and they’ve had no problems,” he said.
But Simpson says there’s little point in looking for other examples to bolster a case for licensed use of a prohibited mark.
“They don’t need any rational basis to withhold their consent. They could let 99 people use it, and then say no the 100th time,” he says.
“Maybe their problem in this case was that it was being used to advertise alcohol, and they don’t like that association with highways. But the key point is that they don’t need to have a good reason.”