Legal news and trends for Canadian in-house counsel and c-suite executives
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retailers felt that the use of their trade- mark on signs outside their storefronts was fully permitted under the Charter. Especially since — you have to under- stand that it's not because you put a trademark on a sign that happens to be in front of a store that it is no longer a trademark and in particular, their cor- porate name or the company name of many businesses is very different from their trademark," says Christine Car- ron, a senior partner in the Montreal office of Norton Rose LLP. In many jurisdictions, she says, retail- ers are permitted to use trademarks in their native language without restric- tion. "In a market that's increasingly globalized, it's a bit difficult to maintain marks that are different from country to country," adds Carron. The signage issue is not a new one in the province. Mark Power, an assistant professor at the University of Ottawa Faculty of Law, focusing on constitu- tional law and language rights, says the generation of cases in this area from the 1980s and early 1990s, such as the 1988 Supreme Court of Canada deci- sion in Ford v. Quebec (Attorney Gen- eral), were essentially testing whether it was legally possible to regulate the language of signs. "Whereas, perhaps it seems like now, there's more of an effort on the part of the Office to insist on implementing the requirements that nobody seems to be really challenging anymore as being illegal," he says. More recent litigation on the issue, says Stéphane Teasdale, chair of the National Franchise and Distribution Group at Fraser Milner Casgrain LLP, resulted in the courts saying that the exception in the regulation can apply to a well-established name, even if it's not registered. Indeed, Moffatt says the concept of what constitutes a recognized trademark is defined under the federal Trade-marks Act, where even non-regis- tered trademarks can have recognized trademark rights. The result of the campaign so far has been a relative flurry of activ- ity since mid-2011 for companies responding to correspondence from the Office, engaging in discussions with organizations like the Retail Council of Canada and waiting to see what the campaign brings, explains Moffatt. When contacted for its views on the campaign, the Retail Council of Canada said it "has no comment at this time." Essentially, says Moffatt, the deci- sion to add a descriptor is a brand- ing and marketing issue, rather than a legal issue, raising the question of the power of a company's brand and who is the custodian of many retailers' most important asset. "I think it's an issue of those specific retailers being in control of their brand and if they make a business decision of 'I want to have a French version of my name,' so like a Shoppers Drug Mart in Quebec is Pharmaprix," she adds. The challenge companies face now is to either work with the Office and try to comply with a policy that the courts have not yet enforced, or take a more challenging position, making them pos- sibly subject to fines, says Teasdale. There are arguments to be made on both sides, say lawyers. For some companies, there is an advantage to adapting their brand for the market, but for others, the brand speaks for itself and adding a descriptor could lessen its impact. "The brand is the brand and if I were a company and I thought that add- ing a French description would dimin- ish the brand or affect the brand in a negative way, I would probably not want to do anything," says Teasdale. But from a strictly marketing point of view, he says, a case could be made that it's a good thing that companies are trying to adapt. "It's just another dem- onstration, when a foreign company comes into a market like Quebec, they have to adapt their concept, whether it's signage, whether it's product line, whether it's appearance of the store, layout of the store, advertising, whatever it is, they generally try to adapt to the market so that it's appealing to the con- sumers in that market," he says. However, one consideration for retailers, explains Teasdale, is that if they add a descriptor in French to a registered trademark, then they have to re-register the trademark to make sure it is protected. If not, he says, you jeopardize that registered trademark. Depending on the retailer and the strength of their brand and business objectives, adding a descriptor could possibly be a positive step, but ultim- ately represents a blurring of the line between what the legal requirements are and what an individual company's marketing decisions are, says Moffatt. Teasdale says he has already had from clients regarding the questions campaign, but at this stage, companies are reflecting on what they plan to do, and possibly looking at market studies. The answer to these questions, he says, is "what's best for your brand?" "I suspect that what you will be see- ing in the next year are companies that are making some changes and others that are just staying the same. But right now, I don't think anybody's running to change their name," he says. From the Office's perspective, it says it is looking for results based on aware- ness and co-operation, rather than legal penalties. Organizations with more than 50 employees are required to register with the Office, where an adviser works with the company to determine which measures it needs to carry out to comply with the Charter, under what it says is a reasonable timeline. The Office has also been meeting with chambers of com- merce and other business associations on the issue. As a last resort, fines of $1,500 to $20,000 could be levied against companies for a first infraction. "In some ways, perhaps it's a less expensive strategy and perhaps a more socially cohesive strategy to warn before things are built, than to run after people after the fact, in order to implement the Act," says Power. Ultimately, says Moffatt, it is perhaps the legislation that needs to adapt. "If the current legislation, which is meant to protect these unique cultural issues and language issues, is insufficient, the appropriate approach is to deal with the legislator and have amendments made to the legislation or the regs," she says. "Things have changed since the '70s with this legislation and we need to regroup, revisit, and revise, and I think retailers would be probably receptive to that," she adds. IH INHOUSE FEBRUARY 2012 • 31