Certification Marks: Ownership and Issues

Author: Marsha Simone Cadogan, Barrister & Solicitor.

Certification marks are trademarks that indicate to consumers that a product or service uses defined standards to distinguish its brand from that of others. While a mark may be registered as a trademark, not all marks can be registered as certification marks. This note provides general information on how certification marks are protected in Canada, the relationship between owners and licensees, and what to consider when managing these marks.

Who can own a certification mark?

A certification mark is not the right option for every business as owners of certification marks cannot monetize the product or service associated with the mark. These marks suit businesses whose primary function is setting standards for specific products or service lines. Examples of certification marks include the WIFI Alliance sign (for WIFI technology); the Woolsafe mark, which conveys to consumers that specific chemical preparations are used in cleaning and maintaining carpets; and the CAN-Best sign, used to indicate that defined standards are used in producing specified building and safety products.

Since the owner of a certification mark cannot monetize the associated product or service, licensing the mark to third parties is at the heart of its business model. These marks can also be used with other product-label trademarks. For example, suppose A manufactures energy-efficient construction machinery under the trademark BX and decides to obtain environmental standards certification from CX. In that case, A’s machinery labels will show two trademarks (its own and the licensed certification mark from CX).

When thinking about trademark registration options (in the context of what is most suitable for a business), it is useful to consider two points. First, whether the owner of the mark will be involved in creating, marketing, and/or selling the product itself. If any of these situations apply, then a certification mark is not an option. The second consideration focuses on whether aspects of your business align well with what a certification mark represents. Certification marks are suitable for businesses operating under any one of the following dynamics:

• The product or service is particular (for example, the certification mark A-1 is used to indicate that the inspection, road testing and warranty done on used motor vehicles are particular);
• The product is made or services performed under specific working conditions;
• A certain class of persons perform the service or make the product (for example, the Igloo tag issued by the Inuit Art Foundation certifies that an Inuit Artist makes an artform) or;
• The product is made, or the service is performed within a specified area (for example, Ontario Craft Brewers’ certification mark indicates that the sign applies to specific breweries in Ontario).

Relationship between certification mark owners and licensees

Owners of certification marks develop the standards used on specific products or services. Licensees are tasked with the other dimensions of bringing the product or service to market. These activities may include product manufacturing, distribution, sales, or performance of a service. While owners are not involved in product commercialization or service performance, they may have direct or indirect control over the quality of the product or service, through standard setting. It is this relationship that helps the certification mark owner to remain relevant players in product/service commercialization and in the maintenance of the mark on the trademark registry. If the owner has direct or indirect control over the use of the mark, its use by licensees (in association with the product or service for which it is registered), has the same effect as if the owner had used the mark in commerce.

Managing Certification Marks

While monetizing certification marks may be relevant to rights holders, managing how these marks are used in commerce is also important. Two worthwhile points to consider pertain to, (i) who has control over the mark and (ii) whether changes in defined standards are amended on the trademark registry.

First, if the mark is owned and controlled by two separate entities (for example, two different government bodies), then the use of the mark by third parties may not enure to the benefit of the owner. This is particularly important when proof of use is called for to maintain a trademark on the registry. While the use of a mark is not required to obtain trademark registration in Canada, proof of use is required to maintain a trademark on the registry.

Second, since set standards play a major role in the link between certification marks and their associated products or services, steps taken to ensure that any amendments to these standards are communicated to the trademark registry are usually helpful in maintaining the link. Such actions also indicate that the trademark owner is exercising control over the integrity of the mark in consumer markets.

                                                  ………………………………………………………

Certification marks are not an option for every business seeking trademark registration. The mark allows defined standards to take center stage in distinguishing a product or service from its competitors. Owners and users of certification marks play different roles in the product or service’s lifespan. These different roles emerge from the statutory limit on how involved certification mark owners can be in the business. Despite these limitations, owners play an important role in managing certification marks. Suppose a licensing agreement gives the owner control over the quality of the certified product, and it is proven that the owner exercises no control. In that case, the mark will likely lose its registration. This indicates that control and use matters to owners of certification marks, even though they cannot be involved in monetizing the marks.

……………………………………….

This article is for general information purposes only and is not meant to be legal advise.