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 FRANÇAIS  

December 2013

A word from Annie

Dear friends,  

Oh joy! Soon it will be the time to take a break and relax for a few days away from the office to share moments of happiness with friends and family.

Life moves at a fast pace: your inbox most likely fills up at lightning speed and I am sure you will be faced with tight and demanding deadlines, without mentioning the many uncounted hours at work.

The Holidays are just on time to remind us how important our friends and family are and to help us realise that it is time to switch off the computer for a while...

As this well-deserved break looms at the horizon, please do not forget to cherish every precious moment you will spend with your family and friends: capture the smile of a loved one discovering a surprise under the tree, savour home-made dishes prepared with love, take the time to put on some warm clothes and take a stroll in your favourite area, discover your latest book while being comfortably wrapped in a warm blanket... Briefly, think about stopping time for a few hours or a few days just to recharge your batteries for 2014 and be prepared for its new challenges! You are worth it.

I wish all of you a great year 2014 filled with happiness, health and generosity. And, as the saying goes: “Everything else will follow!”

Thank you for your trust.

Sincerely,

Annie Fredette

Trade-marks and Alcoholic Beverages: Specific Points to Remember  (Part 1 of 2)

Trade-marks play a vital role in attracting consumers’ attention to the purchase of alcoholic beverages. Marketing considerations are certainly a key element. Also important are the legal criteria to be met prior to their adoption and ultimate protection under the Trade-marks Act1 (hereinafter “TMA”). We now propose to review these.

Protected Geographical Indications (Sections 11.11 to 11.2 TMA)

Geographical Indications (“GI’s”) are a type of Intellectual Property associated with Trade-marks. GI’s identify a product originating from a geographical location or area of a country, which is known or intimately associated with a given quality, reputation or other characteristic of the product.

Specific provisions deal with wines and spirits2. These outline formalities to be met prior to being recognised as “Protected” GI’s. Once this status is secured, it is prohibited for anyone to adopt or use said GI’s, as a trade-mark or otherwise (even a translation thereof), in association with wines or spirits not originating in the territory covered by the Protected GI.

This recognition in Canada stems from international treaties3. The Registrar of Trade-marks is required to maintain a list of Protected GI’s in Canada4 which is open to public consultation5.

Current Protected GI’s are for wines or spirits, which include, for example:

  • Chianti

  • Ontario Icewine

  • Scotch Whisky

However, other types of wines or spirits are currently not protected. For instance:

  •  Port

  • Eau-de-vie

  • Malt Whiskey

This means that a wine producer or distributor could not use the term “Chianti” in connection with a wine originating from anywhere else than that Italian region, even in a generic fashion. On the other hand, the word “Port” is not prohibited per se. This comment comes with an important caveat: it must also satisfy the rules regarding descriptiveness, which we shall see a little further.

Certification marks (Sections 23 to 25 TMA)

Alcoholic beverages can otherwise be protected, if relevant, as certification marks. An important difference between a certification mark and a conventional trade-mark is that the former cannot be used by its owner. The owner is however responsible for granting licenses for the right to use the certification mark. Such a license can only be granted to manufacturers that meet the conditions of production associated with beverages such as their origin from a defined geographical area. This type of protection in intended to insure that any beverage bearing the certification mark is certified” as meeting the required standards and/or that it was produced in a specific territory. This form of protection is not limited to wines and spirits.

Aside from the above distinction, a certification mark is required to meet the same criteria as regular trade-marks, in particular the rules relating to descriptiveness.

However, in a case where the mark is considered to be “descriptive” of the place of origin of the beverages, registration will nonetheless be possible if the owner of the certification mark is an administrative authority or a commercial association located within the concerned area.

Example: A mark comprising the words “Québec Ice Cider” could technically be secured as a certification mark for ciders originating from Québec so long as the applicant is located in the Province of Québec and has the legitimate authority to represent producers thereof. In addition, specific manufacturing standards would have to be outlined upon filing the initial application for registration.

Descriptiveness - Place of Origin (Section 12(1)(b) TMA6)

A third matter to be aware of prior to adopting a trade-mark for alcoholic beverages is the prohibition against the registration of marks that are “clearly descriptive or deceptively misdescriptive”. This requirement finds its source in one of the guiding principles of Trade-mark Law: to prevent one single merchant from acquiring a monopoly on words that are generic to an area of business, the effect of which would be to impede legitimate competition. Over the years, a general consensus emanating from case law has established guidelines for determining when the prohibition applies.

A mark for beverages would be considered to fall under the prohibition of being descriptive of the place of origin of the products if as a matter of first impression, a purchaser of the beverages would perceive the trade-mark as being the place where said beverages originate from, then a serious objection to registration can be expected. The following points will be relevant:

  • If the place in question is where the associated beverages originate;

  •  If said area, region or country has an established reputation as a source of production of the beverages with which it is associated; or

  •  If the place is widely recognized as a manufacturing, trading or industrial center and a likely source of a wide variety of products.

On the other hand, if it is found that the beverages do not emanate from the geographical area referred to by the submitted trade-mark, then an objection can also be raised, this time on the basis that the mark is found to be deceptively misdescriptive of the said place of origin.

Part 2 of this article will be published in the next issue of Info-CRAC.

Should you have any questions regarding trade-marks in general or would like to further explore the afore-mentioned subject, please do not hesitate to contact CRAC’s trade-mark team.

1 Trade-marks Act (R.S.C., 1985, c. T-13).
2 Sections 11.14 and 11.15 TMA
3 The World Trade Organisation (WTO) as established the Agreement on ”Trade Aspects Relating to Intellectual Property” (TRIPS)
4 Section 11.12(1) TMA
5 List of Geographical Indications for Wines and Spirits – To view click here

6 Section (1) TMA: Subject to section 13, a trade-mark is registrable if it is not […]
(b) whether depicted, written or sounded, either clearly descriptive or deceptively misdescriptive in the English or French language of the character or quality of the wares or services in association with which it is used or proposed to be used or of the conditions of or the persons employed in their production or of their place of origin; […].

Resolutions for 2014 at the Registraire des entreprises du Québec (REQ): Name granting guide and registration of commercial trusts

A new name granting guide

REQ employees have compiled a new company name granting guide. This guide is said to be presently in REQ’s hands, which will need to meet with its colleagues from the Office québecois de la langue française before the guide enters into force. It is also scheduled that this guide be distributed for comments to certain renowned research specialists in Québec, among them Denis Livernoche, Manager of name searches at CRAC.

Although no release date has yet been announced, the guide is scheduled to be completed in 2014.

Commercial trusts

The Registraire has scheduled the release of the following articles and paragraphs of the Act Respecting the Legal Publicity of Enterprises (CQLR c. P-44.1): 21(8), 33 in fine, 35.1., for July 1, 2014.

This means that as of that date, any trust operating a commercial business in Québec will have to register with the Registraire des entreprises.

It has to be noted that it will not be possible to register commercial trusts online, but only through paper forms.

Did you know? – Automatic translation of the Québec register for our English-speaking clients!

Do your Anglophone clients ever need a French version of their information statement with the Registre des entreprises du Québec? We have a solution for you!

Our employees can translate the information statement of your files for only $27.00*. We can also add your logo without any additional cost on the translated document.

For further information on this service, please contact Me Pierre Bilodeau at 514-861-7953.

*Rate for a document of 3 pages or less. Fees of $1.50 per additional page apply. Rates do not include taxes.

Record time reached by the REQ for incorporations

Since last February, our Incoweb® platform has qualified for the transfer of B2B incorporation requests with the Registraire des entreprises du Québec (“REQ”). We are happy to announce that the running-in period by the REQ has now been completed. This means that our clients can currently benefit from a much shorter treatment time for their applications for incorporations made through our Incoweb® platform.

In fact, if the REQ maintains its present pace, it will be possible for us to obtain your electronic certificates of incorporation in less than 24 hours for any requests transmitted via Incoweb®(*).

It must be noted that the REQ is now exploring the possibility of extending the data transfer in B2B mode to other services in the course of 2014. We will keep you informed of any relevant development in this regard!

We remind you that for several years now, Incoweb® has already been offering processing time of less than 24 hours to obtain federal certificates of incorporation.

For further information, please contact Kelly Cardoso by telephone at 514-861-2799, ext. 329 or by e-mail at kelly.cardoso@dhltd.com

(*) An additional delay may however occur in the administrative treatment of initial declarations. Furthermore, we remind you that our delays are subject to the level of business and availability of REQ personnel during this Holiday season.

Is it possible for the last remaining incumbent director to resign?
Me Patric Besner (Besner, Avocats d’affaires) – November 22, 2013

Your client is the last remaining / only incumbent director of a joint stock company (“JSC”) and wishes to resign. Can he/she resign without a substitute to succeed him/her?

The Registraire des entreprises du Québec’s (“REQ”) online services and Corporations Canada do not allow a director to resign unless a new person is appointed at the same time.

If you contact these services by telephone to ask the question, you will receive various replies. For example: (i) since the statutes prescribe a minimum number of directors, the corporation does not have the right to go below this minimum limit and the resignation of the last remaining director is therefore inadmissible, if nobody replaces him/her, (ii) “at least one director or a director of the property of others must exist”, etc.

For many professionals, these types of administratively imposed replies may result in generating the impression that in fact the last remaining incumbent director cannot rightly resign without having a replacement.

No legal reason justifies the refusal of their electronic platform to register the resignation of a last remaining director.

There is no provision that prohibits a director from resigning if he/she is the only person serving on a board of directors. Even more so, the Canada Business Corporations Act (“CBCA”) and the Québec Business Corporations Act (“QBCA”) specifically mention1 that a director’s mandate ends in particular at the moment of his/her resignation. Furthermore, both the CBCA and the QBCA expressly provide for the possibility that a JSC may find itself without a board of directors2 – by prescribing that the shareholders can call for an extraordinary general meeting to elect a new one. It must be noted that this is not an obligation.

It is absolutely legally possible for an only or last remaining director of a JSC to resign from his/her functions. The REQ and Corporations Canada should therefore review their online registration procedures to take into account the legal status of this matter. The JSC without its last remaining director will thus certainly find itself in a very particular situation and it will be the responsibility of the shareholders to elect a new board of directors or to take over the director role itself through unanimous vote, but the situation is not illegal – neither for the company and even less so for the last remaining director who wishes to resign.

It is still possible, both with the REQ and with Corporations Canada, to proceed with the resignation of the only or last remaining director of a JSC without the appointment of a replacement director by filling in a paper form (i.e. CBCA: form 6 and QBCA: form RE-400). The processing of this transaction will require several days and at times some telephone or written intervention.

It is recommended that you inform the client that, after the last director has resigned, any person acting in effect "as a director" of the JSC may be considered as a de facto3 director, who will thus assume all the civil, statutory, fiscal and penal responsibilities normally held by the directors.

It is therefore possible for the last resigning director to validly resign. The point in time of such a resignation by the only or last remaining director is a question that is not addressed in this text.

1 CBCA, art. 108 (1) a) and (2); QBCA, art. 142
2 CBCA, art 111 (2); QBCA, art. 146 (2)
3 See among others: CBCA, art. 109 (4)

Holiday Closings

Below please find the holiday closings for the offices of the Québec Enterprise Registrar (“REQ”), Corporations Canada and CRAC:

Date

REQ

Corporations Canada

CRAC

Tuesday, December 24

Closed

Open until noon

Open

Wednesday, December 25

Closed

Closed

Closed

Thursday, December 26

Closed

Closed

Closed

Friday, December 27

Open

Open

Open

Monday, December 30

Open

Open

Open

Tuesday, December 31

Closed

Open until noon

Open

Wednesday, January 1, 2014

Closed

Closed

Closed

Thursday, January 2, 2014

Closed

Open

Open

To obtain a certificate bearing a date between December 24, 2013, and December 26, 2013, we must receive your documents by Tuesday, December 24, before 10:30 a.m.

The same also applies to users of our online system, Incoweb®.

If you need a certificate to bear the date of December 31, 2013, and January 1, 2014, we must receive your documents by Tuesday, December 31, before 10:30 a.m.

Incoweb® users must do the same for documents transmitted to us online.

Please do not forget to specify the required date in your cover letter or on the articles, as the case may be. We will tend to your special requests regarding your documents and remain at your disposal for any questions that you may have.

IMPORTANT: Please note that the above is not applicable for Certificates of Attestation. Please contact Kelly Cardoso (ext. 329) at 514-861-2799 / 1 800-361-5744 or by email at kelly.cardoso@dhltd.com if you need to obtain a specific date on your Certificates of Attestation.

“Kit for new notaries

CRAC has prepared a “kit” for new notaries at an unbeatable price. This set is offered at $255.15 excl. taxes (regular price: $315.00).

The “kit" contains:

  • the first notary’s register, colour of your choice (pink, black, blue, grey, burgundy, purple), with a personalised inscription on the register’s spine;

  • a personalized seal with the Québec coat of arms;

  • a roll of 500 self-adhesive seals, colour of your choice;

  • a box of 500 sheets of prestige notarized paper 100% cotton, adjustment of your choice, and

  • a packet of 25 blue corner tabs

To order, please contact our corporate accessories department at 514-861-2722 / 1-800-361-5744 (ext. 345 or 346) or by e-mail at comptoir.crac@dhltd.com

What’s new with us…

Babies, babies, babies!

Franca Noto, Searches and Registrations Department Technician, is happy to announce the birth of Dominik, her first baby, born September 20th.

Joanna Jacobson, Manager of the Searches & Registrations Services Department and the Bank Act, has added a third little girl, Rebecca, to her family on October 2nd.

Memorable Wedding

On November 9th of this year, Madeleine Cadieux (Corporate Services Manager) and Charles-Frédérick officialised their 12-year relationship during a personalized, informal and warm ceremony. The celebration lasted the entire weekend during which the happy couple was surrounded by their respective families, close friends and their two little girls.

Annual picnic

Our annual picnic was held on September 14th at the "Domaine Meloche" at Deux-Montagnes. Our host, Stéphane Meloche (Internal Systems Support) kindly invited us to his home to welcome the CRAC employees along with their spouses and children. About forty persons gathered to taste the traditional barbecue hotdogs and to enjoy different games: darts, bean bag toss, croquet, flip-flop and washer toss. The day was festive, completely relaxed and a pleasure for all those present, big and small!

Halloween

Once again this year, our team members were invited to use their imagination and audacity in the contest for the best Halloween costume. A day full of surprises!

Competition was fierce to determine the best three costumes. Here is the result of this year’s votes:

1st place: Laurence “bubble gum” St-Aubin

2nd place: Pascale “black swan” Simard

3rd place (tie): Denis "hippie” Livernoche and Stéphane “Stéphanie” Day

CRAC, D+H

1080 Beaver Hall Hill,
Suite 1717
Montreal (Québec) Canada
H2Z 1S8
Tel: (514) 861-2722
Toll free: 1-800-361-5744
Fax: (514) 861-2751
E-mail: crac@crac.com

Notice:
This newsletter is intended to provide information of general interest only and does not offer nor should it be construed as offering any legal advice about specific situations. Individuals or entities using the information contained or referenced herein should not act upon this information without first seeking legal advice from a qualified lawyer in the particular jurisdiction. Given the changing nature of the law, we do not and cannot warrant or assure that the information herein is complete or accurate. You are advised to seek professional legal counsel in the applicable jurisdiction for your specific situation.

This newsletter is published for the benefit of our clients. Please submit any comments in writing to crac@crac.com