Proposed Marketing Bans May Create Trademarks in Limbo

Published November 6th, 2017

As of October 6, 2017, Bill S-228 (the Child Health Protection Act in short) has passed through the Canadian Senate and awaits its second reading in the House. The bill recognizes that the marketing of unhealthy foods has a negative impact on childhood obesity, and enacts laws that restrict the marketing of such foods to children.

The bill in its present form has few provisions, the most material of which is the provision adding section 7.1 to the Food and Drugs Act:

7.1. Subject to the regulations, no person shall advertise unhealthy food in a manner that is directed primarily at children.

The term “unhealthy food” is not explicitly defined by the bill; rather, the bill contains a provision that allows the Governor in Council to make regulations setting out the criteria for determining whether a food is unhealthy. A similar provision also allows the Governor in Council to make regulations determining what it means for advertising to be “primarily directed at children”.

Marks in Limbo

Concerned trademark owners may recognize provisions in Bill S-228 that are also used in, e.g., Bill S-5 (i.e. the Senate bill proposing plain packaging laws for tobacco and vaping products, also presently on its way through the House) and Bill C-45 (i.e. the House bill proposing a Cannabis Act to legalize and regulate recreational cannabis).

These provisions effectively excuse the non-use of a trademark as a result of compliance with the respective advertising prohibitions.

A potentially undesirable consequence of these provisions is the creation of a class of trademarks in limbo, ie. – trademarks not in use, yet seemingly immune to expungement for non-use. In theory, such trademarks could exist on the register indefinitely – sure to be frustrating to some applicants of new marks who have such marks cited against them.

It remains to be seen how Bill S-228 will evolve as it passes through the House, and whether the regulations ultimately made under the Child Health Protection Act will amount to, e.g., a de facto set of plain packaging laws. On the one hand, these regulations could, for instance, take inspiration from the proposed Cannabis Act and restrict the use of “the depiction of a person, character or animal, whether real or fictional”. On the other hand, it is possible that several options for use will be left open to affected trademark owners, rendering the consequence of trademarks in limbo as a merely academic one.

Legislative Treatment

For the curious reader – and for what hints of the future can be drawn from the debates surrounding Bill S-228 – the following passage is quoted from the Proceedings of the Standing Senate Committee on Social Affairs, Science and Technology, spoken by the sponsoring senator, the Honourable Nancy Greene Raine:

I had an email from somebody who said, “You’re going to do away with Tony the Tiger — and I remember him from childhood — and that’s terrible.”

I said to myself: You’re a living example of how powerful the emotional connection is with children when Tony the Tiger is remembered fondly when you’re aged 50. There’s no doubt that if you capture brand loyalty below a certain age, you’ve got a customer for life. But we’re opening up our children to this, and I don’t think it’s good for them. That’s what this bill is all about, trying to dial back that side.

Yes, you’ll still have trademarks out there. Yes, you’ll still have packaging, I’m sure. This will be decided in the development of regulations. There will still be characters on packaging, but it won’t be targeted. You won’t be perhaps putting those cartoon characters at eye level for a 3-year-old in the grocery stores.

I also understand that a country can limit, through their laws, how those rights are used for the purpose of marketing. We’ve certainly seen that be put in place through the tobacco laws. We’re going to have to really look at that with regard to the cannabis legislation that’s coming before us eventually. In tobacco, alcohol and pharmaceuticals, we have broad laws against marketing to all Canadians, and some laws are age-related. I would say that trademarks would likely be used in other ways, in other venues, so they would be able to keep their trademark. (Proceedings of the Standing Senate Committee on Social Affairs, Science and Technology Issue No 25, 42nd Parl, 1st Sess, June 1 2017

 

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